Navigating Divorce as a Business Owner in San Jose: Protecting Your Company & Assets

Divorce is already a complex and emotional process, but the stakes for California business owners are even higher. Divorce can impact your company’s future, finances, and stability if you own a business as a sole proprietor, with a partner, or as part of a larger corporation. Understanding how California law treats business assets during divorce can help you protect what you’ve built proactively.

Here, our San Jose family law attorneys at Feak & Revelo, LLP explain.

Is Your California Business Community or Separate Property?

California is a community property state, meaning that most assets acquired during marriage—including business interests—are subject to equal division unless otherwise agreed. However, whether your business is considered community or separate property depends on several factors.

They include:

• When the business was founded – It may be considered separate property if it was started before the marriage.
• How the business was funded – If community funds or marital resources were used to support or expand the business, it could be considered partially community property.
• The role of each spouse in the business – If both spouses contributed to its success, even indirectly, the business may be subject to division.

A thorough business valuation is often necessary to determine its worth and how it should be handled in the divorce settlement. This valuation, conducted by a professional, provides an accurate assessment of the business’s value, which is crucial for a fair division of assets.

Options for Business Division in a California Divorce

Once your business is valued and classified, you and your spouse must decide how to divide the interest.

There are three common approaches:

• Buying Out Your Spouse – If your business is considered partially or fully community property, you may be able to buy out your spouse’s share by offering other marital assets or structuring a financial settlement.
• Selling the Business and Splitting the Proceeds – While not ideal for most business owners, selling and dividing the proceeds may be necessary if a fair buyout isn’t possible.
• Co-Owning the Business Post-Divorce – Some divorcing couples maintain joint ownership, particularly if they can separate personal matters from business operations. However, this requires strong communication and cooperation.

Steps to Protect Your Business in a California Divorce

If you’re a business owner facing divorce, consider these proactive strategies to protect your company:

• Keep Personal and Business Finances Separate – Avoid commingling marital and business funds to establish the company as separate property.
• Draft a Prenuptial or Postnuptial Agreement – If possible, a legal agreement specifying business ownership can prevent disputes in a divorce.
• Get a Business Valuation Early – A professional valuation ensures a fair and transparent division of assets.
• Work with a Skilled Divorce Attorney – Having an experienced San Jose family law attorney on your side is crucial to navigating the business asset division effectively. A skilled attorney can help you understand your rights, negotiate a fair settlement, and ensure that your business interests are protected.

How Feak & Revelo, LLP Can Help

Divorce as a business owner comes with unique challenges, but you don’t have to face them alone. At Feak & Revelo, LLP, our San Jose divorce attorneys specialize in helping business owners protect their assets and secure fair settlements. With our extensive experience and expertise, you can be confident that you are in good hands.

Contact our Santa Clara County family law attorneys today at (408) 501-8883 or online to discuss your case and develop a strategy that safeguards your business and financial future.