Can a partnership in a family business be considered community property?
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Can a partnership in a family business be considered community property?
4 years ago my brother made me a 45% partner in his business. No money was ever exchanged for this. Basically it was a gift. Now my wife and I are thinking of divorcing. My wife does not and has not worked for this business. There are very little assets and no other employees other than ourselves. We are incorporated and it is just in our name. The way I read the law is, “A spouse’s separate property, which is property acquired before the marriage and property acquired by gift or inheritance, is awarded to that spouse”. Since he gifted me a portion of the business, wouldn’t this qualify?
Asked on October 14, 2011 under Family Law, Nevada
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Yes, a partnership interest in a business can be considered and actually be community property assuming the conditions for a community property claim exist and the state where the business operates recognizes community property law.
If the interest received was a gift for the business, it is technically separate property. However, if you put community time, effort and money into this separate property, then the business can become a community asset especially if this business generates income for the community estate (you and your spouse).
If you wife is considering divorcing you, I recommend that you consult with a family law attorney to protect your interests and assist you in getting your assets in order. Good luck.
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