No one likes to think about divorce when he or she is planning to marry. However, in some circumstances, such as when the person also happens to be a Washington business owner, it is a wise business decision to think ahead and to not ignore the possibility that any marriage could ultimately end in divorce. Doing so enables a business owner to take steps to protect business assets should a marriage someday end in court.
Washington happens to be one of only nine states in the nation that continue to operate under community property laws in divorce. This means that all marital assets are typically split 50/50 between spouses. Unless a business owner executed a prenuptial plan before marrying, marital property would include the value of the business at the time of the divorce.
Before getting married, specifications can be included in a prenup that set a business aside as separately owned property, in which case, 100 percent of the value of the business would go to the spouse listed in the prenup as the business owner. Several business owners recently lamented that they wished they had done more to protect their businesses. One woman said her husband did nothing but complain about her high-end garden landscaping business until divorce papers were filed and he decided to sue her for half the value of the business.
If a spouse launches a business after marriage or simply failed to secure a prenuptial agreement, separate ownership may be defined in a post-nuptial contract, meaning one that is signed during marriage. Another means for protecting business assets in divorce is to transfer business ownership to a trust. Highly profitable businesses can lead to high asset divorce situations that are quite complex, especially when it comes to property division proceedings. This is why many Washington business owners rely on experienced family law attorneys to help them protect their rights and business assets in divorce.
