Protecting Your Business Interests During Your Pasadena Divorce


For many entrepreneurs, a business is almost like a child. They've put their heart and soul into building a successful company and don't want their Pasadena divorce to sabotage their hard work.

The best way for a business owner to protect his or her interests is to have a prenuptial or postnuptial agreement that spells out how business assets will be divided during a divorce. These agreements are particularly important in community property states like California. California's community property laws state that a business started during the marriage will essentially be subject to a 50/50 split upon divorce even if one spouse did not contribute to the development of the business. Having a prenuptial or postnuptial agreement keeps you from losing half of your company when your marriage ends. It's true that postnuptial agreements are challenged more often than prenups, but they still offer enough protection to make them worth the effort and expense.

Forming a corporation or LLC can protect business assets, even if you're the sole owner of your small business. Placing the business in a living trust is another strategy that can be used to keep assets from being divided. However, you should keep in mind that the money in a trust can still be used to calculate alimony payments.

Typically speaking, the more involved your spouse is in your business, the larger share he or she can claim during the divorce. If you don't want to remain business partners with your spouse after your divorce, you may need to pay him or her off using your share of marital assets such as cash, real estate, retirement funds, or stocks. If this is not an option, you'll have to agree to a Property Settlement Note that requires you to make a long-term payout with interest to compensate your ex for his or her portion of the business.

How Can We Help?

If you are a business owner interested in learning more about how to protect your company assets during your divorce, please call our office at (626) 683-8113 or email us at Our matrimonial law firm in Pasadena can help you with questions relating to how California's community property laws will affect your divorce settlement.