CALIFORNIA FAMILY LAW
...Business Interests
......C/P Interest in S/P Business
.........Determining C/P Interest
............Pereira Method
8 Cards On This Topic:
  • S/P invested in business prior to marriage entitled to return in allocating increase in value during marriage; balance is c/p.
  • Even if company was H’s s/p, W may have acquired a c/p interest through her joint devotion of time and effort to it during their marriage.
  • Fam. Code §2640 never designed to apply to s/p businesses, which require Pereira analysis
  • Pereira formula properly applied despite H's receiving fair salary for his services during marriage; equitable apportionment appropriate where business grows during marriage due to c/p efforts.
  • Where the personal efforts managing s/p are de minimis compared to the amount of s/p contribution, the whole will be treated as s/p.
  • Pereira doesn't control where increase in value of s/p not due to efforts of owner.
  • Pereira controls except where owner proves profits from s/p higher than well secured investment.
  • Where increased value of real property due to natural enhancement of real estate values, and not to any improvements made thereon during marriage, c/p acquires no interest.