When you are the owner of a business in California, it is only natural to want to protect your assets. Your business is a result of your hard work over many years, and many divorcing business owners worry that their hard earned assets will be compromised in the event of a divorce.It is important not to be complacent regarding such issues, and anyone with high assets should be extremely mindful of the financial consequences before filing for a divorce. If you plan ahead, many asset division obstacles can be avoided, and parts of the law can be used to your advantage.
It is also vital that you understand the laws in relation to the state in which you are filing for divorce, since the laws across the United States can vary vastly. In the state of California, the law is centered on community property. This means that income and property that were acquired in the duration of the marriage, aside from inheritance and gifts, are considered shared property. This means that they must be divided equally. This type of property also tends to include businesses and the income that is generated from them.
Ways that you can protect your business during the divorce process
While you will be subject to the community property laws to a high degree in the state of California, there are still many ways that you can protect your business. When you establish shareholder agreements or partnership agreements, it is possible to establish protections for the benefit of your other owners. This means that it becomes possible for you to legally protect the assets of your business from the effects of a divorce. Requirements can be put in place to prevent the loss of assets before they occur. For example, you could require that all owners have prenuptial agreements in place before they marry.There are many other ways to make sure that your divorce does not affect the health of your business. It is important that, as a business owner, you conduct research into how a California divorce will affect you, and that you take action ahead of time.