Attorney
March Madness is upon us, and as a New Mexico alum, I’m crossing my fingers. The Lobos have had their ups and downs this season, but they got hot at the right time. And timing is everything in the world of sports.
The same could be said about divorce. I’ve already written about the race to the courthouse when it’s time to file your divorce papers, so today I wanted to talk a bit about another piece of clock management: how timing can turn some business assets into marital property.
Thanks to New Mexico’s community property laws, proving when your business was founded, and how it performed during your marriage, can determine whether it’s something you get to keep post-divorce or something that must be divided 50/50 during your split. This is often the most challenging part of getting divorced if you are a business owner in the Albuquerque area.
Assets Acquired After Tip-Off Are Typically Community Property
New Mexico is a community property state, meaning that assets acquired during the marriage are presumed to belong to both spouses equally. The value of anything that falls into this category, which is known as community or marital property, must be divided 50/50 during a divorce.
For business owners, this means:
- If you started your business after getting married, it’s most likely community property, and your spouse may be entitled to half of its value.
- Even if your spouse wasn’t involved in the business, they still have a stake in it.
The timing of when the business was launched is key. If you were already married when you opened the doors, expect the business to be treated as marital property.
Separate Property: What’s Yours Stays Yours (Sometimes)
The only reason the value of your business wouldn’t need to be divided at divorce is if you can prove it is separate property. Separate property is anything owned by one spouse before the marriage or acquired through inheritance or a gift.
If you started your business before you tied the knot, it may still be considered separate property… but only if it remained truly separate.
Transmutation: Blurring the Lines Between Separate and Community Property
Even if an asset starts as separate property, it can become community property through a process called transmutation. This happens when separate and marital assets are mixed together in a way that makes it difficult to distinguish one from the other.
Some common ways this happen include:
- Using marital funds to expand or support the business
- Hiring your spouse, or otherwise using their time, labor, or resources to help the business grow.
- Adding your spouse’s name to ownership documents or accounts.
- Paying yourself a lower salary and reinvesting profits into the company
Over time, the business that once belonged to you alone could legally become a shared marital asset. Once that happens, it’s much harder to argue that it should remain separate in a divorce.
Serving Families with Dignity & Compassion
Just like in March Madness, where a single buzzer-beater can change the outcome of a game, timing in divorce can determine whether your business remains yours or gets split in half. The difference often comes down to smart clock management — whether it’s protecting separate property early, avoiding transmutation traps, or making strategic moves before filing for divorce.
If you’re a business owner in the Albuquerque area, don’t let poor timing leave you scrambling in the final seconds. With the right legal game plan, you can protect what you’ve built and move forward on a firm financial foundation. Contact Matteucci Family Law today to discuss your case.