Navigating the process of divorce is never easy, but when you own a business, there are special considerations that must be made in addition to the regular and expected issues. As a business owner, there are steps that you can take before and after divorce proceedings to protect your interests, and it is important to know that you have legal options. At the Hodgson Law Office in Spokane, our experienced Washington divorce attorneys can advise you on the special considerations that must be made when getting a divorce with a business involved. Call or contact the office today to schedule a consultation.
One step that you can take prior to divorce filings that can protect your business interests is signing a prenuptial or postnuptial agreement. A prenuptial agreement is signed prior to the wedding, and a postnuptial agreement is signed after. The purpose of this document is to identify each spouse’s property interests, which can include ownership interest in a business. This can avoid fights over the value and ownership of business interests in a divorce.
During the marriage, it is important for business owners to pay themselves a salary from the income of the company as well as keep separate home and business accounts. By paying yourself a salary, the chances are reduced that your spouse will argue that they are entitled to part of the business value during divorce negotiations. Keeping separate business and home accounts prevents any commingling of assets, which may turn a separate business asset into a marital one during a divorce.
Another consideration to make as a business owner is whether you can buy out your spouse of their ownership in the company during divorce negotiations. Washington is a community property state, which means that all marital assets must be split equally between spouses. If the business is considered a marital asset, half of the company’s value will be allocated to each spouse. You may be able to buy out your spouse’s interest in the business during a divorce by sacrificing other assets to make up the value of the business. Depending on the value of the business compared to your other combined assets, it may mean walking away with little other than your company, but it is a consideration to fully keep ownership of your business.
One final consideration in a divorce involving business interests is to sell the business and split the proceeds between spouses. If neither spouse can buy the other out or agree on what to do with the business after the divorce, they can sell the business to an outside party. This option comes with its own set of separate considerations, such as finding a buyer, economic fluctuations, and more. However, it also provides the means for a divorcing spouse to start another company with the proceeds of the sale after the divorce is finalized and the business is sold.
To learn more about special divorce considerations for business owners, call or contact the Hodgson Law Office in Spokane today.