Divorce at the click of a mouse – it may be coming soon to Brazil, according to an AP article published in the San Diego Union Tribune. Brazil’s Senate recently approved legislation allowing online divorces under certain circumstances, and the bill awaits a vote from the House of Representatives. If the bill becomes law, not everyone would be eligible for quick internet divorces, since it’s meant for those with less complicated and consensual divorces. The idea has not come to California yet, but if it did, how well would it work?
As part of Brazil’s online divorce, you’d be able to divide assets. While this seems like it should be simple enough, many of the most difficult issues in a divorce come up when figuring out who gets what. For example, under California law, do you know what happens if one spouse started a business before getting married (making it separate property), and continued working in the business during the marriage? As a general rule, separate property stays with the spouse it belongs to and isn’t divided when divorcing. So does the other spouse have an interest in the business? Well, assuming there was never an agreement to change the ownership of the business, the business is generally still that spouse’s separate property…but that’s not the end of the story. If the business has grown during the marriage, part of that increased value is often shared by both spouses. This is because under California’s community property system, once you’re married, each spouse’s labor is considered a community effort. After all, had that spouse not spent the community’s time improving his or her own business, and instead had earned a salary by working for someone else, then that salary would have been community property.
Once it’s determined that at least part of the business is community property, then you have to figure out what the business’s value is, and how much the community is owed. Depending on the circumstances, it may be that the business earned well over what’s considered to be a fair return on the investment, and so any earnings beyond a “fair return” could be considered a community asset to be divided upon divorce. While at other times, a better approach may be to set a reasonable value on the services of the spouse who worked in the business, and this salary would be the community’s interest in the business. The community may have already received part of this value during the marriage, such as when the money earned is used to pay family expenses. Those payments would be deducted from the salary, and whatever amount remains would be divided at divorce.
Every divorce is different, and many more factors need to be evaluated to fully determine a business’s value. We’ll assess these factors to determine how to fairly value and divide a business and other marital property. Valuation methods vary, and we’ll always work to protect your interests as assets are divided. It may be true that at first glance, a do-it-yourself divorce is tempting for obvious reasons, e.g. speed and cost. But even when couples are on good terms with each other, tough questions come up. You need to know your rights under California law to help ensure you get a fair divorce, and you must fully understand what you’re agreeing to. Otherwise, you may wind up having to deal with dreaded surprises later on if mistakes were unknowingly made during the divorce. Instead, consider cost-effective alternatives such as collaborative divorce and mediation. We’ll discuss your options with you and help you get through the complex property division and divorce process. Reach Minella Law Group’s experienced divorce attorneys at (619) 289-7948.