While some California residents appear to effortlessly glide through life, others find it necessary to plan for each stage of life. These individuals plan where they will attend college and what career path they will follow. They plan their wedding to the last detail, and if they are interested in protecting their financial assets, they also plan their divorce if and when it becomes necessary.
One business entrepreneur, Craig McCaw, has discovered that planning for his divorce could possibly have saved him millions. McCaw owned and then sold a communications company. Approximately one year after the sale of the company, he and his wife of 21 years divorced. In the divorce, the wife claimed that she was entitled to half of the assets accumulated during their marriage; the couple resided in a community property state, and the judge agreed with her. As a result, she received a divorce settlement of approximately $460 million because proceeds from the business sale were considered part of the marital assets.
In a community property state such as California, most assets acquired during the marriage are considered the property of both husband and wife. This can prove to be a challenge for business owners who decide to divorce. Depending upon each spouse’s involvement in the business and the way in which the business is titled, these assets may also be considered part of the marital estate.
When it comes to divorce, it is best to plan ahead. This is especially true if a business venture is involved. Once the decision to divorce has been considered, it would be a good idea to meet with experienced legal counsel to determine the most appropriate method to determine the value of the marital estate and the best way in which to divide it.
Source: The Huffington Post, “5 Entrepreneurs Who Lost Millions From Not Planning Their Divorce Properly“, George Beall, Nov. 15, 2016