Q: Does my spouse have entitlement to business started post-divorce in CA?
I am in the process of divorcing my spouse; we have no prenuptial agreement. After filing for divorce and a judge ordered my spouse to give me 50% of the money in our joint account, I started a business. This happened about a year after the divorce filing, and we had already agreed on a child support plan. Does my spouse have any entitlement to the business I started post-divorce filing, considering our circumstances?
A:
In California, property acquired after the date of separation is generally considered separate property. According to California Family Code § 771, earnings and accumulations obtained after separation are the separate property of the spouse who acquired them. Since you started your business approximately one year after filing for divorce and after a judge had already ordered division of your joint account funds, the business would likely be classified as your separate property.
The date of separation is a critical factor in California divorces. It marks the point when spouses have demonstrated a complete and final break in the marital relationship. Your scenario suggests the separation was clear - you had filed for divorce, a judge had made orders regarding financial division, and there was a significant time gap (one year) before you started the business.
However, be aware that complications could arise if you used any community property funds to start or grow the business, or if your spouse contributed in any way to the business's development. In such cases, your spouse might have a claim to reimbursement or a partial interest in the business, even if the business itself remains your separate property. This is why maintaining clear financial records showing the source of all business funding is important.
For absolute clarity regarding your specific situation, consultation with a family law attorney familiar with California business division issues is recommended. The details of your case, including the formal date of separation and the source of funds used to start your business, will be crucial in determining the final outcome.
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