Property Division During Divorce in Washington State
When a couple seeks a divorce in Washington State, one of the most time-consuming aspects of the process involves the division of marital debts and assets. Like many states, Washington is what’s known as a “community property” state. Generally speaking, this means that any assets or property that the parties acquired during the course of their marriage must be divided between them as they separate.Separate Property Versus Community Property
When two people enter into a marriage, they usually bring individual assets with them. For example, if someone received an inheritance from a deceased relative before they married their partner, the Washington court would likely consider this asset as “separate property.” For the most part, any assets (i.e., houses, cars, real estate properties, businesses, etc.) accumulated during the marriage are considered community property—even if only one spouse’s name appears on the title. As the couple moves through the divorce process, the Court will usually view most of the assets as community property, entitling both individuals to claim such assets as they negotiate the terms of the divorce.Striving for a “Just and Equitable” Division
Many people assume that an equitable division of property means an even fifty-fifty split. However, conversations around property division are often much more nuanced and complex; it’s actually rare for the Court to recommend such a simple approach. Instead, Washington courts strive for a division of property that is “just and equitable” for both parties. Since every marriage is different, “just and equitable” varies from couple to couple. The court uses several factors to guide its decisions for property division, such as the income and earning potential of each spouse, the standard of living the spouses enjoyed during the marriage, whether there are any children to be considered, and many other relevant considerations. Ultimately, the court aims to divide the property in such a way that both spouses are able to enjoy a financially secure foundation to support the transition from married to single life.How Divorce Affects Your Small Business
Your business is considered an asset, just like your home or rental property. You will need to address it during the divorce process, which often requires complex and time-consuming negotiations. As with any other asset, determining how to handle your business calls for a customized legal strategy to ensure that the outcome is just and equitable. Below are a few of the most important considerations regarding how to protect your business during the divorce process.
Timing Matters
First, it’s important to identify when the business was founded. If you established your business before you married your spouse, you might be able to convince the court to consider it (at least in part) as separate property—especially if you have a prenuptial agreement that corroborates your position. Businesses founded during the course of the marriage are much more likely to be considered community property, even if only one spouse owns and runs the enterprise. However, just because a business may be regarded as community property, this does not mean that you must divide it with your spouse. The business is merely one asset in a much larger picture, so you may be able to negotiate an equitable division in which you keep the business while awarding other assets to your spouse to offset any discrepancies.Business Valuation and Divorce
Businesses are inherently complex, especially when it comes to quantifying their value. As you prepare to negotiate the just and equitable distribution of your property, you may have to consider having your business appraised. Deciding whether to take this step is no light matter, as valuation can cost thousands of dollars to complete. Enlisting the guidance of your knowledgeable divorce attorney can help you determine the most appropriate and strategic path forward.Options for Dividing and Allocating Businesses During Divorce
There is no one-size-fits-all model for determining how to allocate business assets during a divorce. Instead, you and your attorney should identify your specific goals and explore your options before making a decision. Let’s take a look at a few options for dividing and allocating your business as you move through the divorce process.
