Dealing with Small Businesses in Divorce: What Washington Couples Need to Know

Divorce is rarely simple, but when a small business is part of the equation, the process becomes even more complex. Whether you’re the business owner or your spouse runs a company, the division of assets, business valuation, and potential financial impact can create significant challenges. As a Washington divorce attorney, I’ve seen firsthand how small business interests complicate divorce proceedings.

1.  Is the Business Community Property or Separate Property?

Washington is a community property state, meaning assets acquired during the marriage are generally considered community property and subject to division. However, determining whether a small business is community or separate property can be tricky:

• Separate Property: If the business was started or acquired before the marriage, it might be considered separate property.
  
  
• Community Property: If the business was founded during the marriage, it is likely community property. If the business was founded prior to the marriage but grew substantially due to community contribution, it’s possible it could be considered a community asset nonetheless.

2.  Business Valuation Is Key

To determine how the business will be handled in a divorce, its value must be assessed. Business valuation involves examining:

• Assets and Liabilities: Tangible and intangible assets, such as inventory, equipment, and intellectual property.
  
  
• Cash Flow: The business’s earnings and profitability.
  
  
• Market Value: What the business might sell for in the current market.

Working with a qualified business valuation expert is crucial to ensure accuracy. This step often becomes contentious, especially if one spouse believes the valuation is wrong.

3.  Options for Dividing a Business in Divorce

Once the business’s value is determined, there are several ways to handle it during the divorce:

• Buyout: One spouse buys out the other’s interest, allowing the business to continue under sole ownership.
  
  
• Co-Ownership: The spouses agree to continue running the business together post-divorce, though this arrangement can be challenging.
  
  
• Sale: The business is sold, and the proceeds are divided between the spouses. This option can be emotionally difficult and may not always be practical.
  
  
• Offsetting Assets: One spouse retains the business, while the other receives assets of comparable value (e.g., real estate or retirement accounts).

4.  Protecting the Business During Divorce

Divorce proceedings can disrupt business operations, especially if both spouses are actively involved in its management. To minimize disruption:

• Separate Personal and Business Finances: Ensure the business has its own accounts and financial records.
  
  
• Consider a Temporary Agreement: A temporary court order can establish how the business will be managed during the divorce process.
  
  
• Maintain Professionalism: Avoid public disputes or actions that could harm the business’s reputation or operations.

5.  Work with an Experienced Attorney

Divorces involving small businesses require a skilled attorney who understands the complexities of business valuation, asset division, and Washington family law. Whether you’re protecting your business or ensuring you receive your fair share, having knowledgeable legal counsel is critical to achieving a favorable outcome.

A small business can represent more than just an income source—it often symbolizes years of hard work and personal sacrifice. Ensuring fair treatment during a divorce is essential for both financial and emotional reasons. If you’re facing a divorce that involves a small business in Washington, contact our office today for a free telephone case evaluation 425-800-0572

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If you’re considering divorce, the thought of meeting with a lawyer can feel daunting. You may have questions about what to expect, how much it will cost, and whether this is the right step for you. At Magnuson Lowell, PS, we understand how important this initial meeting is and want to ensure you feel informed and prepared. Here’s an overview of what happens during a first divorce consultation in Washington State.

1. Understanding Your Goals and Concerns
   The consultation begins with a discussion about your situation. This is your opportunity to share key details about your marriage, any children you may have, and your main concerns. Are you worried about property division? Do you want to understand how custody arrangements work? Are financial support or spousal maintenance (alimony) issues keeping you up at night? This part of the consultation helps your lawyer tailor advice to your unique circumstances.
   
   
2. Explaining Washington’s Divorce Laws
   Your attorney will explain the basics of Washington’s divorce process. As a “no-fault” divorce state, Washington doesn’t require you to prove wrongdoing to file for divorce. You simply need to assert that the marriage is irretrievably broken. The attorney will also discuss Washington’s community property rules, child custody standards, and the options for child support and spousal maintenance. This legal overview gives you a clearer picture of what to expect.
   
   
3. Answering Your Questions
   This is your chance to ask the questions that matter most to you. Common topics include:
   • How long will the divorce process take?
   • What will happen to our house?
   • How does the court decide child custody?
   • What if my spouse and I already agree on terms?
   • How can I protect my financial interests?
   • How can we keep costs down?
     No question is too small or too complex. Your lawyer is there to provide clarity.
     
     
4. Assessing the Details of Your Case
   Every divorce is unique, and this consultation allows the attorney to assess your specific situation. They may ask about your assets and debts, employment situation, parenting responsibilities, and any prenuptial or postnuptial agreements. Providing honest and complete answers ensures your lawyer can offer accurate advice.
   
   
5. Outlining Next Steps
   At the end of the consultation, your attorney will outline the steps to move forward. If you decide to proceed, your attorney will explain how to file the initial paperwork, what documents are needed, and how the process will unfold. They will also discuss potential strategies for negotiation or litigation if disagreements arise.
   
   
6. Discussing Costs
   Your lawyer will review the representation contract (also known as the retainer agreement), which explains the fee structure, including hourly rates, retainers, and any other costs associated with your case. This transparency helps you plan for the financial aspects of your divorce.

Preparing for Your Consultation
To make the most of your consultation, you may wish to start gathering information in preparation for meeting with your attorney. Often, having two years of tax documents and six months of financial account statements and paystubs is a good starting place. Even just having some general information about your financial accounts and debts may be helpful to the discussion. Taking notes on your key concerns and questions can also help ensure you cover everything important during the meeting.

Why a Consultation Matters
The first consultation is a critical step in the divorce process. It’s your chance to understand your rights, explore your options, and find an advocate you trust. Whether you’re ready to move forward or just seeking information, our goal is to provide the guidance and support you need to make informed decisions about your future.

If you’re ready to schedule your first consultation, contact the law office of Magnuson Lowell, P.S. today. We’re here to help you navigate this challenging time with clarity and confidence. Call today for a free telephone case evaluation.

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In Washington State, relationships don't have to involve marriage to carry legal and financial consequences. If you’ve been in a long-term, marriage-like relationship without formally tying the knot, you may fall under what the law defines as a Committed Intimate Relationship (CIR). Understanding what a CIR is and how it may impact your rights and responsibilities is essential, especially when facing separation.

What is a Committed Intimate Relationship?

A CIR is a stable, long-term, marriage-like relationship between two individuals who live together and share their lives. It applies to couples who have not legally married but have functioned as a partnership similar to a marriage. Courts in Washington recognize CIRs to ensure fairness in resolving property and financial matters when such relationships end.

Determining a CIR: What Do Courts Look At?

Washington courts consider several factors when deciding if a relationship qualifies as a CIR:

1. Continuous Cohabitation: Whether the couple lived together continuously for a significant period.
   
   
2. Duration of the Relationship: Longer relationships are more likely to qualify as a CIR.
   
   
3. Purpose of the Relationship: Whether the relationship involved mutual support and a shared life, rather than merely cohabitation for convenience.
   
   
4. Pooling of Resources: Evidence of shared finances, joint bank accounts, co-ownership of property, or contributions to each other's assets.
   
   
5. Intent of the Parties: Statements, actions, or agreements showing an intention to function as a committed couple.

No single factor is decisive; the court considers the totality of circumstances to determine whether a CIR existed.

CIR vs. Marriage: Key Differences

While CIRs share similarities with marriage, there are significant differences:

• No Formal Legal Process: CIRs do not require a legal marriage license or a formal divorce process to separate.
  
  
• Limited Legal Protections: Unlike marriage, CIRs don’t automatically provide rights such as spousal support or inheritance rights.
  
  
• Proof Burden: A party claiming a CIR must present evidence to demonstrate the existence of the relationship, which can be complex.

Can You Have a CIR Before Marriage?

Yes. In Washington, it is possible to have a divorce proceeding that also involves a CIR. For example, let’s say that you and your significant other met in college. After a few years of dating, you moved into the same apartment. Then a year later you bought a house together. Finally, a year later, you got married. It’s possible that – depending on the other factors – a Court might find that a CIR existed during this premarital relationship. In effect, some of the typical marital community property rights may have begun even before you got married. This can create a complicated financial dynamic.

Why Work with an Attorney in CIR Cases?

If you believe your relationship may qualify as a CIR, consulting with an experienced attorney is crucial. Here’s why:

• Clarifying Your Rights: An attorney can help you understand your rights regarding property, finances, and other shared resources.
  
  
• Proving (or Disputing) a CIR: Gathering evidence and presenting a case to the court can be challenging without legal guidance.
  
  
• Protecting Your Assets: An attorney ensures your interests are represented in property division or other financial matters.
  
  
• Navigating Complexity: If your situation involves both a CIR and a marriage, an attorney can help untangle the legal and financial implications.

Committed Intimate Relationships can significantly impact your rights and obligations during a separation. While not a marriage, a CIR may carry many of the same considerations regarding property and finances. Working with a knowledgeable attorney can help you navigate these challenges, whether you’re seeking to prove a CIR or protect your interests. If you’re unsure whether your relationship qualifies as a CIR, call the law office of Magnuson Lowell PS today 425-800-0573 for a free telephone case evaluation.

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