If my wife purchased a business when we were married, can I be entitled to half the business in a divorce?
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If my wife purchased a business when we were married, can I be entitled to half the business in a divorce?
Asked on July 7, 2012 under Family Law, Kentucky
Answers:
S.L,. Member, California Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you live in a community property state, community property is property acquired during marriage. Community property also includes income during marriage. Each spouse has a one half interest in the community property.
Separate property is property acquired before marriage or after the marriage ends. Separate property also includes income before marriage or after the marriage ends. A spouse has no claim to the other spouse's separate property.
If the business purchased during marriage was purchased with income during marriage, the business is community property, and you would have a one half interest in the business. If the business was purchased during marriage with income before marriage, the business would be separate property and you would not have a claim to your wife's separate property.
If the business was purchased with both separate property funds and community property funds, you would have a proportionate interest in the business representing one half of the community property funds used to purchase the business. If the funds used to purchase the business have been comingled (combination of separate property and community property), there is a rebuttable presumption that the comingled funds are community property and you would have a claim as to one half since the funds are community property. Your wife could rebut the presumption by tracing to show which funds are separate property and which are community property.
If the business prospered and expanded during marriage and was purchased with community property income (income during marriage), you could claim that the enhanced value of the business was due to the community property funds and you would have a one half interest in that enhanced value of the business.
If you don't live in a community property state, other rules may be applicable.
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