How To Avoid Unequal Division Of A Business During Divorce

By Gerald A. Maggio, Esq.

divorce mediation orange county; California Divorce MediatorsA divorce can be a complicated process when assets and properties are involved. Through mediation a part of the problem can be solved but since it is a question of finances, couples tend to be skeptical. In case of business, things become even more complicated because unlike other assets, a business has the opportunity to become more valuable. The one who owns the business can claim the business as his/her own as part of the separate property but when it is owned by both, the division becomes difficult.

The establishment time of the business

If the business was established before the marriage, it is most likely that it will have a separate part to it. If you can show that there is a separate part and that it belongs to you, then the court will award it to you. But if you fail to show any such evidence which indicates that part of the business belongs to you, the court is liable to divide it based on the laws governing the division of assets.

Family business

For people who run a business that has been passed down to them from his/her family, the question of division is an important one. They, obviously would not want to part with the business due to emotional attachments. Again, if the business was solely passed to you and no one else and if such a fact can be supported by documents, then the business belongs to you as a separate property. However, if the business was passed on to both you and your spouse, it become a marital property and is subject to division.

Separate property funds

One of the most important things governing your business is property funds. A business could have started when you got married but that does not make it a marital property. If the business is built on property funds that was allocated by you, it can very well fall under separate property. A California court will look into many factors once it establishes where the property funds came from. Things like profitability and value will play a big role in determining how the business will be divided.


Divorces can be scary when the division of property is in question. It becomes worse when property is a business. A California court will look into different factors like who primarily owns the business, whether it was passed down from a family or not and who is responsible for the property funds. After looking into each and every factor it will decide how the business should get divided.

To learn more about the divorce process in California and how mediation can help, please visit our page, What is Divorce Mediation