Business owners in Washington should take extra care in the decisions they make when they determine it is time to divorce. Small, closely held businesses are linked intimately to the owners’ finances. In many cases, these firms are marital property up for distribution as part of the asset division process. Some people may find it easy to reach a settlement, especially when one spouse is more heavily involved in the company, and the people involved are relatively prosperous outside the business. One spouse may take a greater share of real estate or retirement funds in exchange for relinquishing a claim on the company.
However, the issue can be more complicated when the company reflects the bulk of a couple’s marital assets, or it is obvious that there is a substantial upside for the firm, like a planned upcoming investment. As a result, the divorce may not only affect the spouses’ finances but also the business itself. Some companies may wind up with both spouses as holders of significant shares in the company, which can be challenging. In other cases, the business may take on significant debt to reach a buyout agreement with the other spouse.
Fellow partners in a business may also have a lot to be concerned about when one co-owner divorces. They may want to prepare for a future divorce by establishing a buy-sell agreement, under which the other partners can buy out a different partner for specified reasons. This would keep the business itself outside the divorce settlement, although the payout would be included in the asset division process.
Divorce brings serious financial consequences for everyone, but these can be accentuated when a business is involved. A family law attorney may provide advice and guidance on how to reach a fair settlement on spousal support, property division and other matters.