Dividing Assets: Complicated for Divorcing “Tech” Couples

Silicon Valley divorces can be especially complicated for a number of reasons. In many cases, one or both spouses became very wealthy over a short period. They both want to protect that wealth as they go their separate ways.

Further, dividing some types of assets fairly can be a complicated endeavor. Real estate, bank accounts, investments and retirement plans are easy enough to determine the value of and to split.

However, what if much of a couple’s wealth lies in intangible assets like intellectual property (for example, patents, copyrights and trademarks)? These are more challenging to put a dollar figure on. If a spouse founded a startup company, they may have a nice salary, but also hold a significant amount of stock, options and other startup equity.

Since California is a community property state, anything that a person earns or acquires after they get married has to be divided equally with their spouse, even if that spouse had no role in the endeavor that brought that asset in. That’s one reason that prenuptial agreements are particularly popular in our state. Spouses-to-be can stipulate, if they choose, that anything that they earn during the marriage will remain with them if they divorce. A well-crafted prenup that will hold up in court can make the divorce process less combative and expensive.

Even if neither partner has a lot of money when they marry, a prenup may still be a wise idea. It’s often easier to include provisions like this when they’re still hypothetical than once one person is “worth” considerably more than the other.

Unfortunately, some business owners will use their companies to try to hide assets from their spouse. This certainly isn’t unique to the tech industry. This is extremely unwise — not to mention illegal. However, if someone suspects that their partner has done that, there are ways to find money that’s been hidden within a business or elsewhere.

If you’re considering divorce or you believe your spouse is, it’s never too early to start planning. At least, you should know what assets and liabilities you and your spouse both have and start thinking about what you want to take out of the marriage if it ends. An experienced Silicon Valley family law attorney can provide valuable guidance.