How to Characterize, Value and Divide a Business During Divorce
When you are in the midst of divorce, the financial issues that result from dividing a business can be intricate and complicated. Tracing the history of a business’s transactions and its relationship to your divorce, requires experienced counsel. Forensic Accountants sometimes assist in the analysis of a business for purposes of divorce. Tracing the interest in a business and the origin of a businesses financial history is challenging. Focus is primarily on the history of a business to determine the related interests of the spouses in the divorce. The methods for evaluating the financial business interests usually rely on the following:
- Characterization of the Business as Community Property vs. Separate Property
- Transmutations-was there a change in the characterization of a business due to a contract or agreement?
- When did the Business begin and how was it funded, did either or both spouses contribute to the funding, daily affairs or management of the business
- Van Camp, Pereira and different methods to determine the value of a business
- How to determine the Value of a business, cash flow, assets, debts and lease interests
Family Counsel has Unique Experience with Start-Ups, Family Businesses and Real Estate Businesses
In 1996, Mr. Sandler began an Internet Commerce business and oversaw a Reg D 504 Stock Offering. Since then, as a lawyer, Mr. Sandler has counseled countless businesses, including Entrepreneurs, Doctors, Lawyers, Entertainment Companies, Apparel Manufacturers and Designers, Real Estate LLC’s and Partnerships, Financial Firms, Internet Businesses, Restaurants, Retail Stores and a variety of other business entities and organizations. This is an opportunity to use Mr.Sandler’s legal knowledge and advocacy skills to your advantage. For Family law client’s, we offer business operations services having formed and counseled countless businesses. The Law Office of Bradley S. Sandler offer’s business litigation services for its Family law client’s who have business interests to protect. Bradley S. Sandler has business trial experience, and has defended a business appeal successfully before the California Second Appellate District, after Oral argument.
It is Critical to Handle ongoing Business Operations Correctly, including accounting for the financial Details and Data accurately
Van Camp v. Pereira-Community Interest in a Separate Property Business
For Family and Divorce lawyers, the Landmark case of Van Camp and Pereira sets the guideline for Courts determining a Community Interest in a Separate Property business. Van Camp/Pereira concerned the community’s interest in the Van Camp Seafood company, located in San Pedro, California, started by Mr. Van Camp in 1914, two years before his marriage to Ms. Pereira in 1916.
The question in that case was simple. What was the main reason for the business growth of the Van Camp Seafood company during the marriage? Capital or Community labor?
The court looked to see if the business Investment during the marriage, a Van Camp (valued capital approach) was the reason the business grew, or was it market forces. The court also looked at the spouse’s community labor to determine if it contributed to the growth of the business, using the Pereira (person’s community labor) analysis. Whatever standard the court may use, our firm can evaluate business interests and valuations during divorce to determine the correct community interest in a separate property business.
Please call today for a consultation to discuss your business operations and how your business will likely be divided during a divorce. Call the Law Office of Bradley S. Sandler A Professional Corporation Call 310-246-3900 or contact me at bradley@sandlerlawfirm.com to schedule a consultation at my Beverly Hills office.