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What to expect with distribution of property following a divorce

On Behalf of | Jan 18, 2021 | Divorce

The two most important aspects of any divorce is the disposition of minor children and the distribution of marital assets. The state of Arizona is a community property state, which means that all assets accumulated throughout the marriage between the spouses is co-owned by both. While many couples marry with a prenuptial agreement, many others also begin very successful businesses after the marriage began. This can apply to one spouse or the other, but the accumulated assets are community property. Thus, in the event of a divorce, the property is divided in equity. This can also include ownership in a business, which can be impacted dramatically.

Sole Proprietorship

Businesses that are wholly owned by either spouse are assigned as marital property unless the business began before the marriage was effective. And even then, the assets generated by the business during the marriage are still owned by both spouses. These assets are included in the total asset amount at the time of a divorce and will be distributed accordingly. However, businesses not only create income, but they also accrue intrinsic value. The growth value of the business is also an asset, so a certain percentage may still apply in the settlement. An experienced divorce attorney can help with options for avoidance prior to filing or mediating a reasonable payment schedule in a divorce agreement.

Partnerships

Divorces involving spouses or married couples who are business partners with others outside the marriage can get complicated. In addition, they can also impact the other partners when on individual has a claim to a percentage and demands payment in the divorce. Many businesses will require a post-nuptial agreement before a partnership is finalized, but divorcing partners could cause the company to either borrow funds to pay off their stake or rearrangement ownership percentages.

Attorney Roles

Arizona divorce attorneys could be invaluable when high-value divorces affecting a business are being negotiated, and there are several options available that typically involve serious negotiation among all impacted parties. Many times businesses can be sold or loans taken against them, but annual payment or maintaining the co-ownership in percentage can be feasible as well.