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Things to Consider when Dividing a Business During Divorce

Solana Beach, CA – When it comes to finances and divorce, there’s often no ideal outcome for both parties. If you and your spouse owned a business together, things can get even trickier. San Marcos Family Attorney John Griffith notes, “It can be very difficult to ensure a fair division of property, especially if you’re also splitting a business apart.”

Dividing a Business During Divorce

To begin the process of finding out who gets what during the divorce, as far as your business is concerned, a few things must be determined. First among these is what type of property your business is considered.

What Type of Property Is Your Business Considered?

Under California law, there are three types of property during a divorce: community, quasi-community, and separate. (There is even another type, termed “commingling,” which is a combination of community and separate property.) When severing personal and professional ties from your ex, it’s best to consult with an experienced divorce lawyer, as each case is complex and unique.

Says Griffith, “When you’re dividing assets between your spouse, there can be a lot of grey area that gets tricky during the divorce proceedings.”

It’s common for courts to calculate the contribution percentage of each spouse to determine the appropriate allocation of assets.

To decide whether your business is considered community or separate, the following factors will be considered:

  • The date of your marriage
  • The date of valuation of the business during the divorce
  • The source(s) of the business’s funding
  • Each spouse’s business contribution

What Will You Do with the Business After the Divorce?

“While there is no normal outcome for splitting a business during a divorce,” notes Griffith, “there are several common options.”

Usually, if your business is determined to be community property, one of the following scenarios will occur:

  • Both you and your ex-spouse will continue as co-owners of the business. This may not be ideal, but it is equitable. If you and your ex part on amenable terms and are willing to keep the business alive, this might be a good option for you.
  • The business will be sold and you and your ex will divide the profits. If you and your former spouse decide that you don’t want to keep the company, it may be best to sell it and simply split the profits down the middle. If there is any bitterness or resentment during the divorce, this might be the fairest option.
  • One spouse will keep the business and the other will take his or her share (often in the form of other assets). If one of you wants to keep the business but the other doesn’t, this is another choice for a fair division. After your company’s value is determined, one spouse can basically buy out the other’s half.

As always, it’s best to seek professional advice on these matters, especially since there are so many intricacies involved in each case. Your lawyer may be aware of loopholes or special exceptions of which you may not be aware. It’s to your advantage to have your case handled in the most diligent manner possible.

Whether or not you’re dividing assets during your divorce, the proceedings can be daunting. For expert counsel, schedule a free consultation with John Griffith and his San Diego-based family law firm today. With skill and professionalism, the team can connect you with all the resources you need to get through the divorce as smoothly as possible.

Meet Your Dedicated San Diego Family Attorneys
Family Attorney John N. Griffith, CFLS
Family Attorney John N. Griffith, CFLS

Family Attorney, John N. Griffith, CFLS

John Griffith has practiced exclusively in the area of family law since 2009. John is a Certified Family Law Specialist certified as an expert in the area of family law by the California Board of Legal Specialization.


Family Attorney, Catie E. Young, ESQ.
Family Attorney, Catie E. Young, ESQ.

Family Attorney, Catie E. Young, ESQ.

San Diego family lawyer Catie Young has a wide range of litigation experience. She has worked in civil litigation. She has successfully represented clients in many areas of family law including child support, child custody, divorce and domestic violence. She has a unique approach to each child custody case, so clients of Griffith, Young & Lass tend to gravitate toward her in these cases.


Family Attorney Amy J. Lass, Esq.
Family Attorney Amy J. Lass, Esq.

Family Attorney, Amy J. Lass, Esq.

Amy Lass was born in New York and raised in San Diego, California. Amy graduated from Cal Poly, San Luis Obispo in 2003 with a B.S. in Economics with a concentration in Enterprise Accounting and went on to earn her law degree from Thomas Jefferson School of Law and graduated cum laude in 2006. Amy takes a practical and cost considerate approach to the process while striving to balance the emotional needs and objectives of her clients.


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The Typical Divorce Process in California
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I am beyond grateful for the entire staff at Griffith, Young, and Lass. I don't even call myself a client anymore, they are my friends that protected my family and fought with me, side by side.-Erik H., San Diego