What happens to your business if you divorce in Washington?

On Behalf of | Apr 2, 2024 | property division | 0 comments


What happens to your business if you divorce in Washington?

Divorce creates emotional, practical and personal challenges. The process can become even more complicated if you own a business.

Understanding how Washington divides business interests in a divorce can inform your next steps.

Division of assets

When divorcing in Washington, you and your spouse must equitably divide all assets acquired during the marriage. This means that the court will strive to divide property fairly, but not necessarily equally.

The court could consider your business marital property if you started the company during the marriage. A company that predates the marriage may also become marital property if it grew significantly in value during the marriage.

Business valuation

Determining the value of your business is a critical step in the divorce process. A professional valuation may be necessary to assess the business’s worth accurately. The appraiser will account for factors such as income, assets, debts and market conditions.

Distribution options

After establishing the value of the business, you and your spouse have several options for division. One spouse can buy out the other’s interest in the business, either through a lump sum payment or over time. Another option is to sell the business entirely and divide the proceeds.

Spouses may continue co-owning the business post-divorce. However, this arrangement can be complex and requires a clear operating agreement.

Considerations for business owners

During the divorce process, prioritize communication and cooperation with your soon-to-be ex-spouse. Open dialogue and a willingness to compromise can facilitate a smoother resolution.

Washington state has more than 650,000 small business owners. While divorce can be emotionally and financially challenging for these individuals, you can navigate the process successfully. Understanding your rights and options lets you protect your business interests and move forward with confidence.

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