Van Camp Formula — SP Business, Market Growth

The Van Camp Formula is used to determine how much of a separate-property business's growth during marriage is considered community property. If the business's increase in value is mainly due to the investment rather than the owner's efforts, the community is entitled only to the value of any services provided by the owner during the marriage.

A husband owns a tech startup as his separate property. During the marriage, the business grows significantly due to a large investment from a venture capital firm, not because of the husband's daily involvement. Under the Van Camp Formula, the community would receive compensation only for the reasonable value of the husband's work, while the remaining growth in value would remain his separate property.

Van Camp: Community gets paid for labor, but the business growth stays separate.

Students often confuse the source of business growth, mistakenly attributing it to personal labor rather than capital investment. This can lead to incorrect calculations of community property entitlement.

Questions typically present a scenario involving a spouse's separate property business and ask for the division of its growth, requiring application of the Van Camp Formula to determine community versus separate property.