In a state where equitable distribution controls property division, your prompt action can be critical to saving your business during a divorce. Because Washington family courts do not split assets equally, your spouse can wind up with a bigger share of what you’ve worked so hard for.
During divorce proceedings, it is crucial to establish whether your company is separate or community property. The court may view your business as separate property if you founded it before marriage. However, your spouse may still have a claim if they contributed in some way.
To protect your life’s work, consider exploring some of the strategies below with help from a divorce lawyer.
Keep business finances separate
As you approach divorce, be careful not to use marital funds to pay for any business expenses. Keeping finances separate can prove beneficial when determining what is and is not community property. Records that show the source of business funds may further help support your position.
Leverage marital agreements
If you have a valid prenuptial or postnuptial agreement, now may be the best time to use it to your advantage. These agreements often help assert a business as separate property. Review your agreement for any clauses that shield your business from property distribution in the event of divorce.
Evaluate your spouse’s involvement in the business
The less involvement your spouse has with the business, the stronger you can claim that it is not community property. If your spouse works for the company, however, consider what options are available to ease them out diplomatically. A buyout or other similar arrangement may be in order. To avoid potential conflict, it is crucial to act with consideration.
Negotiate using other valuable assets
Equitable distribution allows for some flexibility. If maintaining sole ownership is your priority, consider other assets you could offer during negotiations. Your spouse may be open to foregoing their stake in the business for valuable assets such as real estate.
Divorces are challenging in many ways. Although the strategies above can be a start, an experienced attorney can craft a more effective action plan tailored to your situation.
Your business is the result of sleepless nights and hard work. In the face of divorce, stay focused and take calculated steps to protect your interests.