Is My Spouse Entitled to Half My Business?

June 10, 2024 | By Roy M. Doppelt
Is My Spouse Entitled to Half My Business?

Property division is one of a divorce's most challenging and complex aspects. When a couple ends their marriage, they must divide their assets and debts. This process involves determining what is marital or separate property and how to distribute any marital property between the parties.

Every couple has property, assets, and/or debts of some sort. This means that property division will be an issue in every divorce case. However, some spouses face a more challenging road due to the nature of their property and must divide. One situation commonly leading to disputes and complications is when one spouse owns a business.

If you own a business and are facing divorce, you need to consult a highly experienced divorce attorney near you immediately. Ensure your lawyer has experience handling complex property division matters before you proceed.

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Some Property is More Complicated Than Others

While some assets and debts may be straightforward to divide, others can present more challenges.

High Assets

High Asset Divorce

Dividing assets during a divorce can get particularly complicated when spouses have high-value assets. In these cases, the guidance of a skilled divorce attorney who understands high-asset property division is essential.

One of the biggest challenges in dividing high-value assets is accurately valuing them. This can include investment portfolios, real estate, valuable collections, and more. Determining the true worth of these assets requires a thorough analysis, often involving forensic accountants and appraisers. An experienced attorney can help ensure that all assets are properly valued, allowing for a fair and equitable division.

Another complication that often arises in high-asset divorce is determining each spouse's contribution to the marital property. This is especially important when one spouse owns a business or holds valuable professional licenses. In these cases, determining the non-owning spouse's entitlement to a portion of the business or professional goodwill can be a complex process.

A knowledgeable attorney can help navigate through these challenges and advocate for the fair division of assets.

Additionally, tax implications must also be considered when dividing high-value assets. Certain assets may have different tax consequences upon distribution, and it is important to have an attorney who understands the potential tax implications and can help minimize any adverse tax consequences.

High-asset property division in divorce can be highly complex and requires a skilled attorney. With their knowledge and experience, they can oversee accurately valuing assets, determining each spouse's contribution, and mitigating tax implications.

Business Interests

Business Interests

When a married couple owns a business together, or one spouse owns business interests alone, it can create additional complications and considerations during the divorce proceedings.

One of the main concerns is whether a spouse must divide the business itself. In many jurisdictions, assets acquired during the marriage are considered marital property and subject to equitable distribution. This means both spouses may be entitled to a share of the business's value.

Dividing a business can cause problems with its operations in many situations. An important consideration is the ongoing management and operation of the business. The company might not benefit from an inexperienced spouse suddenly having a significant ownership stake. There might also be business contracts in place, such as a buy-sell agreement, that the spouses might comply with.

If the spouses own the business together, it may not be practical or in the best interest of both parties - or the company - to continue running the business together after the divorce. In such cases, it is crucial to have a plan in place for the future of the business, whether it involves selling the business, one spouse buying out the other, or other arrangements.

Furthermore, the spouses must also address the division of business debts and liabilities. The spouses must determine which debts are associated with the business and how to allocate them fairly.

Navigating the division of business interests in divorce requires the guidance of a skilled divorce attorney who understands divorce laws, business valuation, property division, and other legal considerations involved. Your attorney can advocate for your interests, negotiate a fair settlement, and protect your rights to your business ownership throughout the process.

If you or your spouse owns a business and are considering divorce, your first step should be finding a sophisticated divorce attorney.

Are Business Interests Marital Property?

When one spouse is a business owner, the main question is whether business interests will be marital property. To answer this question, you must understand the concept of marital property and how it is determined in a divorce settlement.

Marital property generally refers to assets the spouses acquired or earned during the course of the marriage. This can include real estate, bank accounts, investments, and even business interests. However, the classification of business interests as marital property can vary depending on several factors.

One key factor is the timing and nature of the acquisition of the business. If one spouse started the business prior to the marriage, it may be separate property and not subject to division. On the other hand, if the business was started during the marriage or if marital funds were used to support or expand the business, it may be marital property.

However, even if a spouse owned a business before the marriage, any increase in value during the marriage can be marital property. This means the spouses must determine what portion of the business value is marital or separate property.

Another factor that can influence the classification of business interests is the contribution of both spouses to the business. If one spouse was actively involved in the day-to-day operations or made significant contributions to the success of the business, their efforts may be recognized and result in a larger share of the business assets.

Whether or not business interests are marital property in a divorce depends on various factors, such as the timing of the acquisition, contributions made by both spouses, and how marital funds were used toward the company. To ensure a fair division of business assets, always consult a skilled divorce attorney from the beginning of the case.

Valuing the Business for Divorce Purposes

Business Valuation

You must accurately determine the value of your business to ensure a fair and equitable division of assets. Valuing a business can be a complex task, as various methods are available to calculate its worth. A divorce attorney can identify the most logical way to value your company for the purposes of your divorce case.

One common method of valuing a business is the income approach, which assesses the future earnings potential of the business. This approach considers factors such as the company's profits, growth projections, and market trends. Another method is the asset approach, which focuses on the business's tangible and intangible assets, such as equipment, property, patents, and intellectual property.

Your attorney will gather the necessary financial records and work with experts to accurately assess the value of your business. They will also guide you through the negotiation process, ensuring you handle the division of this very important asset fairly.

Dividing Property in a Community Property State

Property division rules can vary depending on the state in which you live. In community property states like California or Arizona, the law dictates that any property acquired during the marriage is community property and is subject to a 50/50 split between spouses. This means that if you started a business during your marriage, your spouse may automatically be entitled to half of its value in a community property state.

However, there are exceptions to this rule. If you can prove that the business was started before the marriage or it was a gift or inheritance, you may argue that it should be considered separate property and not subject to division.

Community property laws can make divorce challenging, and you must have the guidance of a skilled attorney who understands community property division. An experienced family law attorney can explain your rights, evaluate the value of your business, and negotiate a fair division of property in line with your goals.

Options for Keeping Your Business in a Divorce

You may be wondering if your spouse is entitled to a share of your business or whether you risk losing your livelihood in your divorce. While every case is unique, several options are available to help you keep your business intact during a divorce.

One option is to negotiate a settlement agreement with your spouse. This agreement can outline the divorce terms, including the division of assets. By working together with your spouse and your divorce attorney, you might come to a mutually beneficial arrangement that allows you to retain ownership of your business. This may involve compensating your spouse in other ways, such as through cash or other assets.

Another option is to establish the value of your business and buy out your spouse's share. Once the value is established, you can negotiate a buyout agreement with your spouse, allowing you to maintain sole ownership of your business.

If negotiating a settlement or buying out your spouse's share is not feasible, you may consider restructuring your business. This might involve converting the business into a partnership or incorporating it into a trust. By changing the structure of your business, you may protect your ownership interests and minimize the impact of the divorce on your business operations.

Going through a divorce while protecting your business requires the representation of a skilled attorney. An attorney experienced in both divorce and business law can protect your business ownership, helping you explore your options and make informed decisions.

You Need a Divorce Lawyer to Resolve Complex Property Division Matters

Divorce Attorney

Divorce is already difficult and emotional. Letting go of half of your property can add to the trauma of changing your entire life. Property division can become even more overwhelming and concerning when you own a business you built, care about, and plan to run to support yourself well into the future.

There are different ways you can resolve the matter of property division, including your business interests, in your divorce. Always seek a divorce lawyer who handles complex property matters and will explore every possible option to protect your rights to continue running your business with the least disruption possible.


In some cases, negotiation between spouses and their respective attorneys can lead to a mutually agreeable property division arrangement. This process allows both parties more control over the outcome and can result in a fair and efficient resolution.

Often, your spouse might be more than willing to find an arrangement that allows you to keep the business. They might have no interest in ownership or preventing you from continuing with the company. However, your spouse still deserves their fair share of property, so you must determine how to address this in the divorce settlement through your attorneys’ negotiations.


Mediation is another option for resolving property division matters. A neutral third party, known as a mediator, guides the conversation and helps facilitate communication between spouses to reach a consensus. Mediation can be a more cost-effective and less adversarial approach compared to litigation.


Litigation may be necessary if negotiations or mediation fail to resolve satisfactorily. In this scenario, a judge will make the final decisions regarding the division of property, including business interests. It is important to note that litigation can be a lengthy and costly process, so exploring alternative dispute resolution methods should be considered first.

Though most people aim to avoid litigation in a divorce, it might be necessary if you cannot agree on critical issues. Some things are worth fighting for in court, and your prized business might be one of them.

Consult a Divorce Attorney Near You

When facing the complex issue of property division involving your business, it is essential to consult with a qualified divorce attorney. A skilled attorney can guide you through the legal process, protect your rights, and help you achieve a favorable outcome.

Contact a respected divorce firm to schedule a consultation and discuss your options. Never leave the future of your business or other property to chance in the divorce process.

Roy M. Doppelt Author Image

Roy M. Doppelt

For nearly 30 years, San Diego family law attorney Roy M. Doppelt, Esq. has been providing clients in Southern California with comprehensive legal services. He is currently an active member of the California and San Diego Bar Associations, and he is admitted to practice law in both California and Illinois state courts, as well as the Federal District Court for the Southern District of California.

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