Legal Question in Business Law in Washington

Re: WA State - Corporation/Legal Separation

If there is no buy/sell agreement in place providing otherwise, a shareholder's interest in the event of the shareholder's death is handled as part of the shareholder's estate.

I'm going to assume that the shareholder in question (whether you and your business partner) was married at the time you formed the corporation. The interest in the corporation would be community property, and half would belong to the spouse, assuming the shareholder was still married at time of death. The other half would pass according to you shareholder's will, or according to the laws of intestacy, if there was no will. If there is no will, and if the shareholder has no children, all will go to the spouse.

Your interest in the second corporation is most likely community property. If the company was formed prior to the marriage, growth that took place after the marriage is community property, unless you were strictly a passive investor, never took any part in running the company, and did not invest further after marriage.

When you get your legal separation, you may be able to negotiate to have your interest in the company designated as your separate property (in exchange for something else, not as a matter of right).

Your question highlights why shareholders' agreements, including buy/sell provisions are a good idea, as are wills.