If you’re a CEO, member of a company board or majority shareholder in a business, there are things you can do to protect your business in a divorce. Here are some of the steps you should take as a Washington resident to ensure that the end of your marriage doesn’t negatively affect your earnings.
The impacts of divorce on your business
Divorces can be complicated. Ex-spouses have to make decisions as overseen by a family law judge, including custody of the children and decisions about who will continue to live in the marital home. Even if you have an uncontested divorce, your ex may have a claim on all the assets that are in your name. This is because your business may be considered marital property.
Equitable distribution or community property
How much is at stake with your company when you decide to divorce? Currently, there are nine states that are known as “community property” states. They are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. If you reside in one of these states, your assets, including your business, will be split 50/50.
Daily business operations
You may need to take some time to yourself to deal with the emotional strain of divorce. If you’re also running a business during this time, your focus will likely change to deal with your personal life, and this could put your company at risk.
You may want to take a break from the business for some time to deal with family issues and tend to your emotional health. You might want to meet with a financial advisor to see if selling the business and selling your stake is the best option. There are many complicated issues to address, so it’s important to assess your priorities and tend to them.