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Addressing Business Ownership In Divorce

If one spouse owns or co-owns a share of a business, it becomes a major asset in divorce and raises key questions for property division. What is the value the business? How will the business be divided? What portion of the business is separate property? What portion of the business is community property?

The Law Offices of Thomas M. Polinger in Hermosa Beach has extensive experience in business valuation and the division of marital assets. Principal attorney Thomas M. Polinger has 35 years experience in the practice of family law. He has represented owners of small businesses and professional practices — or their spouses — in divorces throughout the South Bay area and Los Angeles County.

We have the resources and experience to reach consensus on valuation of the business, and the creative touch to find the solution in property division. Call us at 310-697-8868 to arrange a consultation.

Understanding Business Valuation In Your California Divorce

Our firm has successfully resolved divorces involving restaurants, medical practices, law firms, software companies, manufacturing companies and all manner of closely held businesses. We capably address the most complex issues, including:

Accurate valuation — Accounting for inventory, accounts receivable, fixtures, leases and the building (if owned) can be complex and involve other business professionals, such as business appraisers. A common area of disagreement and litigation between the parties is the company’s goodwill (name recognition and reputation in the community). Forensic accountants are called in, often arriving at different values. Mr. Polinger has the sophisticated knowledge and experience to cross-examine the other side’s experts in litigation if no compromise can be found.

Allocation — If the business interest was owned prior to marriage, part of the value of the business is separate and the rest is community property. The allocation formula is influenced by the Pereira and Van Camp court cases: is the appreciation in value due chiefly to the individual’s efforts or to the business itself? Mr. Polinger has experience litigating this issue and identifying tax consequences.

Distribution — Unless the ownership stake is liquidated and the proceeds divided, the business owner will have to buy out the spouse’s share:

  • Through cash settlement
  • In installment payments after the divorce is finalized
  • By equalization using other assets of the marital estate (e.g., the family residence or an equalizing share of retirement assets)

Put Our Team Of Specialists In Your Corner

Mr. Polinger’s network of valuation experts, courtroom savvy and negotiating skills enable our clients to protect their financial interests without stalling or escalating the divorce proceedings. Call our Hermosa Beach law office at 310-697-8868 or contact us online.