(0:00) Hi everyone, I’m Dr. Michael Mantell with another Family Law Matters, joining Bonnie Rabinovich (0:07) Mantel, who is the owner and managing partner of the Primus Family Law Group here in San Diego. (0:14) Hi Bonnie. Hi Michael, how are you doing today? I’m doing great, thank you very much for asking, (0:20) I hope you are as well.

Yes, it’s a lovely day. It really is. So Bonnie, I understand that when (0:28) people go through a divorce, that oftentimes there is difficulties with selling the business, (0:36) splitting the business, figuring out how to change the business around ownership-wise and so forth.

(0:43) Let’s take a couple of minutes and talk about how that’s done well through a divorce process. (0:50) Well, you know Michael, if you’ve got a business, if one person has started a business during the (0:56) marriage, well, everything that we acquire during the marriage is presumptively community property. (1:03) Now, most people are going, wait a minute, wait a minute, wait a minute, what are you talking about? (1:05) It’s my business.

I started it, I ran it, I went to work from six in the morning to nine at night, (1:12) what are you talking about? Well, I hate to burst your bubble, but it is a community property (1:18) business because your efforts and your skill is a community piece of property. So if you’re getting (1:28) divorced, you’re going to have to divide the community interest in that business. (1:35) And that means most often than not, we have to get a formal appraisal.

Now, I can hear people going, (1:41) wait a minute, wait a minute, wait a minute, my business isn’t worth anything. If I walk out the door, (1:46) there is no business. It’s all up here.

I have a computer in my brain, that’s my business. (1:52) Well, that may be true. Tough.

You’re still going to have to have an appraisal of the business. (2:01) And now don’t freak out. It doesn’t mean, oh my God, I’m going to have to pay millions of dollars (2:06) to keep my business.

No. The analysis, Michael, is, well, if you’re a personal service business, (2:13) like being an attorney, right? I do own my business. It’s really all me and my staff.

(2:20) If we walk out, there is no business, but you still have to do the analysis as to whether (2:27) or not the community was properly compensated during the marriage. If it was, any possible (2:34) buyout is far smaller. Maybe Goodwill, you certainly have a brand that was contributed (2:41) to by during the marriage.

So you’re going to have to buy out. Now, if your business is not (2:47) based on community, on personal skill, so you own a, I don’t know, car dealership. (2:54) That’s going to be a different analysis.

And likely there’s going to be a different structure (3:01) for a buyout. But in either case, if the determination is that the community is owed (3:07) something, yup, in order to keep your business, the business you worked at, you will have to (3:16) equalize or pay out money to keep that business, buy it out. And if you can’t buy it out, (3:23) the other side may be able to force you to sell it.

(3:27) What if they both agree, no, no, I don’t want to sell it, but I want money every month. (3:35) Well, there’s a, there’s a, that’s a good question, Michael. (3:39) If one person’s keeping the business, then all the income becomes the income of that person, (3:45) which means that’s income available for support.

If what you’re talking about is a percentage of (3:50) the profits, that’s an equalization payment. That’s buyout over time, structured over time. (3:58) Mm-hmm.

So is the person really selling the business out? (4:05) Are they losing eventual control in any way? (4:10) No, it’s, it’s, it’s almost like a little bit of a fiction. (4:13) Yeah. (4:14) You’re still working the business.

(4:16) Right. And still earning the money. (4:17) You’re still working the business, but in order for the privilege of continuing to do it without (4:23) interference with your marital business partner, you’re going to have to get rid of your marital (4:30) business partner.

How do we get rid of business partners? (4:34) Legally. (4:34) Buy them out. (4:35) Legally.

And if people have questions about how to get rid of your marital business partner legally, (4:42) how can they be in touch to learn how to do that? (4:46) You can reach me directly. It’s 619-574-8000. And if your case or your businesses are in San Diego, (4:54) we’re more than happy to put you on my calendar for a free 30 minute phone consultation.

(5:00) You can also reach us online at our website at www.primusfamilylaw.com. (5:09) There’s a form to fill out and we will schedule that consultation.