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Community Property

Dec 21st, 2015 | By | Category: Jack Schrock's Blog

Jack Schrock Twenty five years ago a friend’s son married and went into business the same year. He called on me for some recommendations for organizing his business affairs. I spent several hours with him in order to better understand his needs and then gave him a list of recommendations, not the least of which was to “separate and isolate your business and personal assets from each other” which he chose not to follow.

I recently got a call from his dad who said that his son and daughter-in-law had decided to divorce one another and the judge had ordered mediation to determine the distribution of assets, etc. since everything they had was equally owned by the marriage partners under the law of Community Property. Today he has a successful business that he alone developed through years of hard work but she now has claim to half the business.

How this plays out is anybody’s guess but if she gets half the business, he gets a new business partner which may be her or a new boyfriend. Otherwise, he may be forced to sell his business to pay off her share.

Fifty percent of today’s marriages fail, so put some business in your business.