Q: Husband set up a LLC - S-SCORP 2 weeks prior to marriage. What is community income and how is it treated for divorce?
He is showing a salary of $40K on paper and pretending like he is broke but buying luxury cars, etc while I'm working full time and driving a 15 year old vehicle. I have no visibility of any financials but I know the business makes money.
A:
Generally speaking both the salary earned during a marriage, as well as the income earned on separate property, would be considered community property. The appreciation in value of an LLC interest that is part of a spouse's separate property would generally be separate property.
That being said, there are many situations where the community estate could have claims against a spouse's separate property and that is a discussion better had with an attorney in a full consultation.
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