A spouse’s business is a marital asset, subject to division in divorce. The key determinations in dividing one party’s business estate are the worth of the enterprise and the amount that is considered community property. Schoenberg Family Law Group, P.C., regularly handles divorces involving closely held businesses and professional practices. Serving San Francisco and the Greater Bay Area, we represent business owners and their spouses in all facets of property division.

Business Valuation In California Divorce

According to California community property law, the spouse of a business owner is entitled to a 50 percent share of that business or professional practice, provided that it was created during the marriage. If the owner started the business prior to marriage, then the spouse is entitled to half of the appreciation in value of the business that accumulated during the marriage, depending on the type of business and compensation earned during the marriage.

Van Camp and Pereira are two different methods for determining the marital appreciation of a premarital practice or business. Our divorce lawyers are familiar with both methods, and we work closely with experts to decide which approach is more beneficial or applicable to your circumstances. Typically, each side hires its own business valuation expert. If the parties are unable to negotiate a compromise, then the court will assign a value after hearing all of the evidence.

Once a value is determined, the issue is how the business owner spouse will buy out the other party’s community interest in the business or practice. It may be a tradeoff of other marital assets or debts. It may be a cash settlement or future promise written into the settlement agreement. In other situations, spouses may choose to continue as co-owners, or agree to liquidate or sell the business and divide the proceeds.

We have considerable experience in the disposition of medical practices, accounting firms, law firms, architectural firms, and other professional associations as well as sole proprietorships, and ownership stakes in partnerships, LLCs, and corporations. Schoenberg Family Law Group, P.C., can address the tax considerations, income drawn from the business, and other issues relevant to the broader divorce settlement.

“In addition to being entirely ignorant of the legal process of divorce, my situation has been exceptionally difficult because of very stressful circumstances. Debra has shown her skill and her professional grace by helping me to present a strong defense at a time when I was not remotely capable of defending myself. I believe her to be honest and very astute. She is also very mindful of keeping her client well informed. I highly recommend the Schoenberg Family Law Group.”

— E.A. (View more testimonials.)

Discuss Your Closely Held Businesses Or Professional Practice

Schoenberg Family Law Group, P.C., has litigated California divorces for nearly 40 years. We anticipate common disputes related to business valuations and separate property, and we help clients find creative and practical ways to compensate a spouse for equity in the business.

Talk with San Francisco attorneys who are familiar with valuing professional practices and businesses throughout the Bay Area. Contact us online, or call us at 415.834.1120.

* Certified in family law by the State Bar of California Board of Legal Specialization.