One of the major issues in any divorce in Arizona is equitably dividing the marital property between the spouses. The Tempe divorce lawyers at Blake & Pulsifer can assist with all issues relating to your divorce.

When the two spouses are in business together, there are additional complicating factors. The question of what happens to the business and whether and how it is to be divided can be the most difficult aspect of the divorce to handle. The spouses will face a number of issues, including whether to remain in business together and the potential value of a buyout of one of the spouses.

Schedule an appointment with a Tempe divorce attorney at Blake & Pulsifer by calling our team at 480-838-3000 early in the legal process. We can work to protect your interests and advocate for your position.

Arizona Is a Community Property State

Divorce presents complicating factors under any circumstances. Things can become even more difficult when you are in business with your spouse that you are divorcing. Then, there are even more complex issues that come into play, such as dividing the business and determining whether both spouses will continue to play a role, and what role they may play.

At the outset, Arizona is a community property state, which means that the assets of the spouses are equitably divided. This includes the business. Each spouse may be entitled to an equal share of the value of the business. How the two spouses reach that point may be the subject of intensive negotiations and even litigation.

Here are some of the issues that could complicate any negotiations about the business and how it is affected by divorce.

Is the Business Considered Separate Property?

In a community property state, not all assets are necessarily divided equally between the two spouses. One spouse may have started the business before they were married, and they brought on the other one as a partner. In that event, not all of the business’s value would be considered assets that are to be divided. However, at least some of the business value might be considered community property because the company may have grown in value since the time that the two spouses were married.

What Happens to the Business Going Forward?

There is no denying the fact that it will be difficult for spouses to work together in a business after they have ended their marriage. They will need to consider what their business relationship is going forward, should they continue to maintain one. In some cases, the spouses may decide that they simply cannot work together, and only one can remain as part of the business. In that instance, the spouse who will remain in the business may need to buy out the share of the other one. It may be possible to maintain the business relationship, although the spouses should consider a legal agreement that dictates roles going forward. In other cases, the spouses may determine to sell the business and divide the proceeds.

How Is the Business Valued?

If the solution to what happens to the business is a buyout, there will be questions about the valuation of the business. Each spouse should hire their own valuation experts to support their positions.

Assets May Be Traded in a Divorce

It is important to know that, while assets are generally divided 50/50 in a community property state, it does not mean that the receiving spouse will automatically get money for their share of the business. Spouses are always free to trade Assets in a divorce, meaning that the other spouse may get something like the house or an entire investment account in exchange for their share in the business.

If the spouses cannot agree on what to do with the business and how to divide the proceeds, the court would make the determination. In some rare instances, a judge may even order the business to be sold, and the proceeds split between the spouses.

Contact a Tempe Divorce Law Firm

Learn more about how your business may be affected in a divorce, and what you can do to advance your rights and interests, by speaking with a Tempe divorce attorney at Blake & Pulsifer. Message us online or call us today at 480-838-3000 to speak with a Tempe divorce lawyer.