Those business owners who are currently or considering going through the divorce process should keep in mind that Arizona is a community property state, meaning that ownership of the business is considered a shared asset. This leaves it vulnerable to being split alongside other assets in your divorce. Losing part of your ownership isn’t a guarantee, however. For those who are interested in retaining the full ownership of their business after a divorce, the court may grant full ownership to a single spouse.
How Judges Decide the Division of Property
In general, judges prefer to keep the ownership of the business whole, so that the spouses aren’t forced to also become business partners as a result of the divorce. The spouse who will retain their full share of ownership will likely compensate the other for their share, either by paying a specified amount to them or by providing more assets from other parts of their shared property. In the case that this wouldn’t resolve the division of ownership, the court may still assign ownership of the company evenly split between the spouses, particularly in cases where the business was established as a partnership.
Both Sides Should Perform Evaluations
Whether or not you’re seeking to retain ownership of the business or to receive compensation for your share, an accurate evaluation of the business is necessary to ensure you get a fair deal. As such, experienced business appraisers are used to placing a value on the business and determining a fair amount of compensation. Accurate evaluations and evidence are used to evenly divide the business, so an attorney with experience in these evaluations can argue for a fair amount. Because the business is an asset, an accurate evaluation is also critical to accurately determining other aspects of the divorce, like the amount of alimony.
When businesses get tied up in divorce, it’s crucial that your attorney take the right action to ensure that your business is protected. With accurate evaluations and years of experience in helping business owners through their divorces, we’re able to help protect your business from your divorce. Contact Monahan Family Law at (623) 385-3190 for assistance in your divorce.
Monahan Law Firm, PLC
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