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Ely, Counselor at Law
Category: Family Law
Satisfied Customers: 102140
Experience:  Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
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I'm using general names, and . If a married couple ( and )

Customer Question

I'm using general names, John and Jane. If a married couple (John and Jane) share ownership of a business (50/50) and Jane gives her share to their children and then divorces John, does John have to give half of the business he owns (25% of the original overall ownership) to Jane? This question is coming from California.
Submitted: 1 year ago.
Category: Family Law
Expert:  Ely replied 1 year ago.

Hello and welcome to JustAnswer. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

I am sorry to hear about this situation. There is no statutory regulation that deals with this. California law only guides the Court in determining what is separate property, what is quasi-community property, what is quasi-marital, and what is community property. See HERE.

The answer would be at the discretion of the Court, and the Judge would very much look at the following like factors to determine how to categorize the remaining business interest of John and whether or not to divide it at a divorce:

1) Whether or not Jane gave her interest to her children in anticipation of the divorce, hoping to get 25% more in the divorce,

2) Whether her children actually control the business, or, it is in their name only and really, Jane still controls 50%,

3) Whether or not the children will likely give Jane back 50% after the divorce,

4) What work Jane has done for the business, and

5) Whose separate capital went into funding the business.

Very likely, the Court will be mistrustful of Jane, and may deny her 25% more, figuring that she may get 50% back from the children and control the business with 75% as was her plan all along.

I hope this helps and clarifies. Please use the SEND or REPLY button to keep chatting, or please RATE when finished. You may always ask follow ups at no charge after rating. Kindly rate my answer as one of TOP THREE FACES/STARS and then SUBMIT, as this is how experts get credit for our time. Rating my answer the bottom two faces/stars (or failing to submit the rating) does not give me credit and reflects poorly on me, even if my answer is correct. I work very hard to formulate an informative and honest answer for you; please reciprocate my good faith with a positive rating.

Customer: replied 1 year ago.
Thanks Ely. Can you explain #2 and what are the implications?
Expert:  Ely replied 1 year ago.
Sure. What I mean by this is whether or not Jane gave the 50% to the children in name only, but it is really her who is still exercising control. Meaning, she makes the decisions, and they are simply yes-men, holding the 50% in name only while she tugs the strings behind them.
Gentle Reminder: Please, use REPLY or SEND button to keep chatting, or RATE POSITIVELY and SUBMIT your rating when we are finished. You may always ask follow ups at no charge after rating.