Whether your spouse will receive any portion of your business in your divorce depends greatly on a number of different factors. Whether all or part of the business constitutes community or separate property, the length of your marriage, ownership of the business, and the longevity of the business are all factors that help determine how a business should be divided in a divorce. The resolution of this issue is often complex and requires the assistance of an experienced Washington divorce lawyer.
The first step is to determine to what extent the business is community property. Determining whether a business constitutes community or separate property is not always the easiest process. If either or both parties started the business during their marriage using marital assets, then the business is community property to be divided in the divorce. If, however, one spouse owned the business prior to the marriage, and the other spouse contributed nothing to the business during their marriage, then the business is the separate party of the spouse owner. The more difficult case exists where one spouse uses separate assets to start the business prior to the marriage and the other spouse contributes to the value of the business during the marriage. Particularly in the case of a long-term marriage and business that has existed for a good portion of that marriage, at least some portion of the business is likely community property, with the remaining value of the business constituting separate property. In the most complex cases, an expert may be needed to help evaluate and determine how much of the value was contributed from the community and how much is separate property.
The second step is to determine how much each spouse should get as their share of the business. In Washington, all property is before the court, regardless of its nature as community or separate property. The court’s role is to ensure that each spouse has a fair division of the assets upon divorce, which means that each spouse is able to start their life over again. The division of a business can occur by agreement or by order of the court. For example, the parties can agree that one spouse should retain ownership of the business, and that spouse will “buy out” the other spouse’s portion of the business, either through a cash payment, installment payments, or by awarding other property of equivalent value to the other spouse.
The divorce process can vary greatly from case to case, and some cases are much more complex than others, especially those that involve the division of businesses. No matter what issues arise in your divorce proceedings, however, we are here to help. The lawyers at Ashby Law have handled countless family law and divorce cases throughout the years, and we have the experience that you need. Contact an experienced Washington divorce attorney today so that we answer your questions about your Washington divorce.