Entrepreneurs in Chandler and elsewhere are innovative, dedicated people who put substantial time and energy into creating, opening, and successfully running businesses and other enterprises. Although many entrepreneurs also have successful, fulfilling marriages and families, relationships sometimes suffer when the bulk of one or both spouses’ attention is focused on their business enterprises and divorce becomes inevitable.
When you and your spouse have reached the point of ending a marriage and filing for divorce, as an entrepreneur, you have much at stake and face a complex legal process for dividing assets under Arizona’s community property divorce laws. A Chandler divorce lawyer with experience navigating divorces between entrepreneurs is the best ally to protect your rights and unique interests.
Whether one or both spouses own and operate a business together or run separate businesses, all enterprises become subject to equal division during a divorce. Even if a spouse opened their business before the marriage, it’s likely that the other spouse has a right to 50% of the increase in value that occurred during the marriage, particularly if they invested any time, talent, or money into the business, or if they cared for the home and children so their spouse could focus on improving the business.
During a divorce between entrepreneurs in Arizona, the process of asset division begins with complete financial disclosures listing both party’s assets, property, and debts. To divide assets—including businesses—fairly, all businesses owned by one or both spouses must undergo valuation.
Valuation is the process of using professionals to evaluate a business’s total value. This paves the way for a fair division, allowing the spouses to choose whether one spouse should buy out the other spouse’s portion or they should sell the business and split the profits. In less common cases, divorcing spouses who can communicate effectively continue to run a business together after the divorce. Often, each spouse uses separate valuation experts who may use different processes and end with different bottom lines for value—typically a result that best suits that spouse’s goals. For instance, the asset approach arrives at a value by determining the total worth of a business’s assets.
The market value approach arrives at a figure by comparing the business to similar entities on the market. The income approach looks at the amount of income a business generates for the owner. When both spouses arrive at a value for one or more of their businesses and neither spouse disputes it, their divorce lawyers can begin to negotiate a settlement agreement between the spouses.
Because both spouses may have arrived at different values for their businesses depending on the method their valuation expert used, it’s common for divorcing entrepreneurs in Chandler to fail to reach a mutually acceptable settlement agreement. In these cases, the divorce becomes a contested divorce. Both sides must present their arguments and evidence in court for a judge to decide on any of the disputed divorce terms, whether it’s on how to fairly split their business value, or other common aspects of divorce such as child custody, spousal support, and the division of other assets like real estate property, the family home, vehicles, and household goods.
If you are an entrepreneur who has devoted your time, energy, and resources to a business, facing a divorce has impacts that go far beyond the end of your emotional bond with your spouse. To protect your best interests, it’s crucial to hire an attorney with experience in this specialized area of Colorado divorce law. Call Wilson Goodman Law Group, PLLC today so our Chandler family law lawyers can quickly take action to safeguard your interests.
