In this article, you can discover
- Whether you have a legal interest in your home, even if you were not the one paying the mortgage and/or were not employed but stayed at home.
- What the three options for handling interest in a business are.
Do I Have A Legal Interest In Our Home Even If The Title Is In My Spouse’s Name?
If the title to your marital home is in your spouse’s name only, the question of whether or not you have a legal interest in the home depends on a number of factors that are unique to your situation.
Primarily, the court looks at principal payments and appreciation to figure out what interest the community has in the property.
In a community property state like Arizona, the community owns each dollar earned by a spouse, with each member of the community owning half of that same dollar. So, if only one spouse is working and making payments on the home loan, the other spouse will still get an interest in the property – called a “community lien” – because their half of each dollar is also going to pay that home loan, even if they aren’t working.
While a community lien is typically not going to pay out as much as when both spouses’ names are on the property title, it is a question worth bringing up with an experienced family law attorney. It is also worth examining the mortgage statements and property valuations focused on appreciation.
This is especially true for long-term marriages where lots of payments have likely been made and the home has likely appreciated significantly in value.
A prenuptial or postnuptial agreement can also play a significant role in determining what kind of interest you have in a property, so it is worthwhile to seek an attorney’s opinion if you have either of those kinds of documents.
If Either Of The Parties In A Divorce Own A Business, How Is This Handled When It Comes To The Division Of Assets?
If a business is involved in a divorce, the division of the business as an asset depends on what the spouses want to do with the business. There are generally three options:
- Option One: If the spouses are business partners and are able to continue running the business together even after the divorce, both parties will be awarded half the business and would go forward operating it as business partners.
- Option Two: If one spouse is involved in the business and the other person isn’t involved, the business could be awarded to the spouse who runs it.
In these situations, the parties (or the court) must find a way to buy the non-involved spouse out of their community interest in the business. What that community interest is will be a fact-based question that looks at things like effort spent building the business, funds contributed, etc.
Figuring out what the fair buyout amount for the non-owner spouse requires valuing the business. Typically this is done with the help of an expert witness.
After the expert has given their opinion of how much the business is worth, the operating spouse can choose to “buy out” the other spouse’s community interest in cash, or perhaps by trading other assets to that spouse.
- Option Three: If a buyout is not possible and the couple cannot work out an agreement on how to move forward, the business may have to be liquidated.
In that situation, you are probably going to get less for it because you will have to pay business creditors and investors before either party gets paid.
Liquidating a business is a worst-case scenario because when the business goes away, the income source is lost. A cash payout after liquidation is very likely going to be worth less to both parties than it would be if one spouse could have kept running the business and bought the other spouse out.
With the guidance of a skilled attorney for Family Law, you can have the peace of mind that comes with knowing that we’ll make it look easy.