You are going to get married. You have substantial net worth. You have a business that you have built up over the years and it is now doing well. You are excited about your upcoming marriage and you don’t want to do anything that might take the excitement out of the process. Since you already own the business and you already have accumulated your worth, there seems to be nothing to worry about. After all, community property, as you understand it, encompasses that which you acquire during the course of your marriage. You already have the business and the assets going in, so in the off-chance it does not work out you will be okay financially.

While it is true that in California assets that are acquired prior to marriage, or that are acquired through a gift or inheritance are separate property – they don’t always remain so. If the business you are operating continues to grow through the marriage, the appreciation in the value of that business becomes community property. As a community property state, the law provides that accumulations made through the efforts of a spouse while married are community property. As a result, that growth that your business has experienced becomes community property as well. It does not mean that the entire business becomes community property, but some portion of it is jointly owned by you and your new spouse which means that if things do not work out – your new spouse is going to have his or her share of that business coming to them. This can create significant problems when it comes time to divide up the marital estate. It may be that most of your assets are tied up in that business and it may then become difficult to buy your new spouse out of it.