When divorce is on the horizon, many couples may think about the most commonly disputed assets – the family home and any vacation properties, retirement accounts, as well as other financial accounts. For the couples that are also business partners, divvying up the family business is an added concern that should be addressed with a skilled and experienced Arizona divorce attorney.
Getting Down to Business
Generally most states across the nation equitably distribute property between divorcing spouses. This does not mean that property – both assets and liabilities – will be divided 50/50 but, rather, it will be distributed “fairly”. Still, other states recognize the principles of community property whereby assets acquired during the marriage are owned in equal parts absent an agreement between the spouses.
When a family business is up for grabs during a divorce in Arizona, both spouses likely have ownership in the organization. If the couple is unable to come to an agreement on how to divide the business, a court will have to step in and apply the relevant rules of property division. First, the court must determine whether or not the business is marital property – this includes assets and liabilities. Next, the court must calculate the value of the business. Finally, the court must decide how to divide the business.
Factors that an Arizona family court may consider when determining how to divide a business include, but are not limited to: the date the business was started, where the funds used to start the business came from, what contributions were made to the business by each spouse, the skills needed to successfully continue to run the business, the value of the business at the time of marriage and any change in value at the time of the divorce.
Even if the business was established prior to the marriage, it may still be considered marital property by the courts if separate and marital funds were commingled with the business finances or if the non-owner spouse quit his or her job to run the business. In the same manner, a business acquired during marriage may not be considered marital property despite Arizona law’s strong presumption that all assets and debts accumulated during nuptials are considered marital property. Nonetheless, a family business that was inherited or received as a gift or if an agreement is in place between the spouses whereby only one spouse is the owner may categorize the business as nonmarital property.
Phoenix Divorce Attorney
Whether you or someone you know is facing a divorce or is considering divorce and has questions about division of property under Arizona law, contact a seasoned Phoenix divorce attorney to address your concerns. Whether the issue divorce, property division, child custody or any other type of family law issue Phoenix lawyer Ronald L. Kossack can help you navigate through this complicated area of the law. Click here or call (480) 345- 2652 today for your initial case evaluation.