Right to Reimbursement of a Portion of the Increase in Value of a Separate Property Business

California family law provides for a reimbursement to the community of a portion of the increase in the value of a business owned by one spouse before the date of the marriage in certain situations.

Can a Separate Property Business Become a Community Property Business During a Long Marriage?

Initial Characterization of Business

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No, if a business is acquired prior to the date of the marriage it will be characterized as the owner’s separate property.

If a business is acquired during the marriage it will generally be characterized as community property. The characterization of a business will not change during the marriage unless there is a transmutation by written agreement of the business itself from separate to community.