High-Asset Divorce in Encino: Protecting Business and Real Estate Interests
When a marriage involves businesses, luxury properties, and significant investments, the stakes in a divorce are higher than most people realize. In a high-asset divorce in Encino, the challenge isn’t just deciding who gets what but about preserving long-term financial health while trying to understand California’s complex property division laws.
If you own a business, hold real estate, or manage a large investment portfolio, you don’t need general advice. You need a strategic plan that protects your financial future, years beyond the divorce.
This guide cuts through the noise to focus on what matters most: how to safeguard your business and property interests in a high-net-worth divorce.
What Is a High-Asset Divorce in Encino?
In California, a high-asset divorce generally involves a marital estate with significant value, often several million dollars or more. These cases may include ownership of businesses, luxury homes, investment properties, stock portfolios, and other high-value assets.
Encino’s premium real estate market — with home prices far above the state average —makes asset division even more complex. For high-net-worth couples, divorce is about strategic asset preservation, not just division.
Key Property Division Laws in California
California is a community property state, meaning that most assets acquired during marriage are owned equally by both spouses. Separate property assets owned before marriage, gifts, or inheritances remain with the original owner. But in practice, dividing property is rarely simple.
Assets can be mixed, traced, or commingled over years of marriage.
California Family Code § 760: “Except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property.”
Quasi-community property, which is property acquired while living out of state but treated as community property in California, also applies to many couples moving to Encino from elsewhere.
Tracing funds and identifying whether an asset is community or separate is critical. A home purchased before marriage but paid down with marital funds may require a Moore/Marsden calculation to determine each spouse’s interest.
Moore/Marsden Rule: Determines community property interest in a home purchased before marriage but paid down with marital funds — often pivotal in Encino real estate division cases.
Protecting Business Interests During Divorce
If you or your spouse owns a business, you’ll face two main challenges:
- Valuing the business accurately
- Determining ownership or buyout terms
Business Valuation Methods
- Pereira: When growth came from a spouse’s active efforts
- Van Camp: When growth came from passive income or external market forces
Professional practices like law firms or medical offices often include “goodwill” valuation, which separates personal reputation from the business’s monetary value.
During divorce, it’s critical to protect business operations with temporary orders, NDAs, and financial confidentiality agreements.
Division of Real Estate in High-Asset Divorce
Real estate often includes:
- Primary residence
- Commercial property
- Vacation homes
- Rental portfolios
If real estate was acquired before marriage but improved or paid down using marital funds, Moore/Marsden applies.
Timing of valuation matters too. A home’s value at the date of separation may differ drastically from its value at trial, especially in volatile markets like Encino.
Other key factors:
- Tax exposure (e.g., capital gains or depreciation recapture)
- Out-of-state or trust-held property, which may involve additional court filings or legal procedures
Uncovering and Valuing Complex Assets
High-asset divorces often involve assets that are harder to identify or value. Stock options, restricted stock units (RSUs), intellectual property, and overseas investments require expert analysis.
California law imposes strict disclosure requirements.
California Family Code § 2100: Establishes the duty of full and accurate disclosure of all assets and liabilities in divorce proceedings.
If a spouse hides assets, the court can impose sanctions or even award 100% of the hidden assets to the other spouse. Forensic accountants and valuation experts are often essential in these cases.
Equity compensation, such as stock options, is divided using formulas like Hug or Nelson, which account for the portion earned before and after the marriage.
Steps to Safeguard Your Interests
The earlier you prepare, the stronger your financial position.
Key steps to take before or during a high-asset divorce:
- Gather all financial documentation (returns, statements, deeds, ledgers)
- Secure independent appraisals for real estate and business interests
- Work with family law attorneys experienced in Encino high-net-worth divorces
- Avoid transferring or liquidating assets without legal advice
- Establish a litigation strategy that considers tax, risk, and long-term growth
Engage legal and financial professionals who understand the Encino market and California family law.
Pereira vs. Van Camp: Business Valuation at a Glance
| Formula |
When Used |
Focus |
Encino Example |
| Pereira | Growth mainly from spouse’s efforts | Allocates more to community property | Local marketing firm expanded by owner’s direct sales efforts |
| Van Camp | Growth mainly from external factors/capital | Allocates less to community property | Rental real estate LLC with passive income growth from market conditions |
FAQs
What qualifies as a high-asset divorce in Encino?
It involves marital estates with substantial value, including businesses, multiple properties, and complex investments that require detailed valuation and legal expertise.
How are business interests divided in a California divorce?
Courts use methods like Pereira or Van Camp, based on whether growth came from personal effort or capital investment.
What is the Moore/Marsden calculation, and why does it matter?
It calculates community interest in a property bought before marriage but paid with community funds.
Can my spouse hide assets in a divorce?
California law requires full disclosure; hidden assets can result in severe penalties, including awarding them entirely to the other spouse.
How are stock options and RSUs divided?
They’re split using formulas like Hug or Nelson, which allocate shares earned during the marriage.
What steps should I take before filing for a high-asset divorce?
Gather all financial records, get valuations, and consult qualified legal and financial experts early.
Conclusion
In a high-asset divorce in Encino, protecting your business and real estate isn’t about winning but, rather, securing your financial future. From applying valuation methods like Pereira, Van Camp, and Moore/Marsden to uncovering hidden assets and discerning California’s disclosure rules, every step counts.
The earlier you prepare, the more control you have over the outcome. At Pedrick Law Group, we work closely with financial professionals, forensic accountants, and valuation experts to protect what you’ve built. From strategic planning to courtroom advocacy, our team knows what’s at stake.
If you’re facing a complex divorce involving significant assets, schedule your free consultation today and get the clarity you need to move forward with confidence.