Many Arizona businesses family-owned. In some cases, the spouses started the business together before they got married and then continued as business partners during the marriage. This may add some extra stress in the event that the couple decides to get a divorce.
A couple who shares a business will often also share their personal finances and may have a joint bank account for their personal funds. Depending on the circumstances, some of the couple’s ownership interests in the business may be considered community property and some may be considered separate property. Determining which assets belong to which spouse can be very difficult in such cases.
The business might also suffer if the couple goes through a high-conflict divorce with the public image of the company being tarnished by reports of the divorce and property division issues. Under Arizona’s community property laws, the family court judge will order equitable division of the couple’s community assets at the time of a divorce proceeding.
One of the solutions that many attorneys suggest in the event that a couple shares a business or have a financial relationship beyond their marriage is to enter into a prenuptial or postnuptial agreement. A prenuptial or postnuptial agreement can enumerate the property and assets that belong to each of the spouses, identify which assets are community property, and set forth how the business and personal assets will be divided in the event of a divorce. It is wise to retain an experienced family law attorney to draft a prenuptial or postnuptial agreement to ensure it will hold up in court if the need ever arises to enforce it.
Source: Forbes.com, “Business and marriage do not go together like a horse and carriage,” Steve Parrish, Aug. 17, 2015
