In a divorce, what is property and business division? At a high level, it’s just like it sounds. It refers to how much of a couple’s property is divided between the two parties, as well as how a business is divided. This can be tricky though, as there are a number of factors that go into the division.
Property Division – The Basics
During a divorce, most of the assets owned by the couple are considered to be jointly owned. These can be both physical assets and monetary assets. For example:
- Homes (houses, condos, townhouses)
- Mutual funds
- Precious metals such as gold or silver
- Collections and antiques
Because these items make up the bulk of wealth for most families, they play a significant role in the property division part of the divorce. That said, there are a few exceptions that arise from time to time.
Property and Business Division – The Exceptions
Even though most of the assets owned by a family are considered during a divorce, some tend to be left out and remain in the hands of a particular owner. Here are the most common exceptions.
- Property owned prior to the marriage. Note that if the spouse is added to the title, this is more likely to be considered an asset that can be divided during the divorce.
- Pain and suffering money received from a personal injury judgement, assuming it wasn’t put into a joint account or all spent.
- An inheritance received by one spouse, assuming it isn’t incorporated into the rest of the family’s assets such as using cash to buy mutual funds in a joint account.
- A gift received by one spouse from a third party. For example if your in-laws buy a car for your spouse and it’s only in their name.
Notice a theme? The general theme is that if assets get brought into the family and are considered owned by both parties, it won’t be an exception anymore.
Business division is also something that can get messy.
Business Division in a Divorce
Several things go into the business division in a divorce.
First – Is it operated by just one spouse who started the business before the couple was married? If so, there is a better chance the business will not need to be divided. Even though the income from the business may be considered during the alimony and financial support piece of the divorce, the business and its assets may not need to be split between the couple.
What if the business was started during the marriage, and both spouses participate? Maybe they both work for the business or maybe both owners tend to use the business funds as their own personal money to pay for things like meals, clothes, cars or vacations. In those cases, the court is more likely to have the business divided up.
Every property and business division case is different. For more personalized advice and guidance, please give us a call at 714.456.9118 or send us an email at email@example.com.
Courtesy of Cuselleration