Divorce Attorneys for Business Owners in Avondale, AZ

Overview

A West Valley contracting business can be worth a great deal and show almost nothing in the bank on any given day, because the money is out on jobs.

Valuing that correctly is the difference between a fair settlement and a bad one, in either direction. Call for a free consultation.

Is the business community

How Arizona Characterises a Trades Business

A.R.S. § 25-211 presumes that what either spouse acquires during the marriage is community property, and the spouse arguing an asset is separate carries the burden of proving it.

Where the business predates the marriage, A.R.S. § 25-213 keeps it separate along with its rents, issues and profits. That is the starting point rather than the finish. Years of community labour and community money can build a community interest in the growth, and in an owner-run trades business the labour is the business.

When it comes to dividing, A.R.S. § 25-318 requires the court to assign separate property back and split the community equitably, though not necessarily in kind.

What is actually there

Work in Progress, Retainage and the Bond

Three assets get missed in trades businesses more than any others.

Work in progress. Jobs part-completed at the valuation date represent earned value not yet billed, and a balance sheet prepared on a cash basis will show none of it. On a business running several jobs at once this can be the largest single item.

Retainage. Money already earned and contractually withheld until completion is a receivable, not a maybe, and it belongs in the estate.

And the bonding capacity, which is not a balance sheet asset at all but is often the reason the business can bid the work it bids. A settlement that strips working capital can quietly destroy bonding capacity and with it the earning power the support calculation assumed.

Equipment schedules, the licence itself and any personal guarantees the non-owner spouse signed all need to be identified rather than assumed.

Running it meanwhile

Trading Through a Divorce Without Breaching the Injunction

When a petition is filed, A.R.S. § 25-315 produces an automatic injunction stopping both spouses from transferring, encumbering, concealing, selling or disposing of community property, with an exception for anything related to the usual course of business.

For a contractor the grey area is wider than for most. Bidding and completing jobs, paying subs, replacing a failed truck and drawing on an established line are ordinary trading. Pledging equipment as security for new borrowing, selling a major asset, or moving money into an entity in someone else’s name are not, and the last of those will be read as concealment.

The injunction is enforceable by contempt and carries the force of a signed superior court order. It binds you from the moment you file, and the other spouse from service or actual notice.

Where something genuinely necessary falls outside routine trading, get written consent or ask the court. Doing it first and explaining later is how owners lose credibility on everything else.