Marriage isn’t easy – especially if you have the added stress of running your own business. If you find yourself facing divorce as a business owner, you likely are concerned about how your split will affect your business. You have put long, hard hours into building your business to succeed. Now, will you have to give your spouse half of your business’ assets?
How property is divided in Washington divorces
Washington is a community property state when dividing property in divorce. That means you will split your assets, including your business assets, 50-50 with your spouse if you launched the business while you were married. Even if you launched your business before you were married, your spouse likely will receive some of your business assets if:
- You didn’t seek a prenuptial agreement.
- You didn’t place your business in a trust.
- You didn’t create a buy-sell agreement for your business.
- You didn’t pay yourself a fair wage.
Dividing business assets
The first step in dividing your business assets in divorce is to determine how much your business is worth. Once you have a business valuation, you’ll have to decide if you want to:
- Buy your spouse out
- Sell your business
- Continue owning your business with your ex as a co-owner
You may need to arrange to buy your spouse out over time or seek a business partner or investor to help you buy out your spouse.
When it comes to divorce and owning a business, it’s better to plan ahead before your marriage breaks down. Working with a family law attorney, you can draft a prenuptial or postnuptial agreement to protect your business in the years ahead.