Many couples considering divorce in Texas are also proud owners of successful businesses. This leads to questions like, “Will I be able to keep the business?” and “Will my ex get a share of the business?” The answers depend on your specific case. Let’s discuss some of the property considerations made during a business divorce.
Texas Is a Community Property State
Texas is a community property state, which means assets accrued during your marriage are subject to division in court. If you created your business before your marriage, the law considers the business separate property.
To have the court deem your business as separate property, you’ll need to provide proof that the business began before the marriage in court.
Other Considerations to Make When Dividing Businesses
Sole Proprietorship vs. Corporation
Texas’s community property law does get a bit more complex depending on the type of business you own. For example, if you own a small sole proprietorship that doesn’t have many assets, it is more likely that the business will remain yours.
Corporations or large businesses with many assets are more challenging to divide. In some situations, these businesses cannot be divided but instead may need to be sold. This will require business valuation services to determine the fair market value of your company.
Jointly Owned Businesses
Do you and your spouse both own the business? If so, there are additional considerations to make. For example, the court will want to make sure proper division occurs without destroying the business. This requires creative property division. For example, you or your spouse may need to buy-out the other’s interest in the business or offset the difference with other assets such as 401K plans or home equity.
It’s also possible that you and your spouse can work amicably together in co-ownership of your business after your divorce. You’ll need to determine this and more as you go through your divorce.
Does Your Divorce Involve a Business or a High Amount of Assets? Call Us.
Complex divorces, such as those involving businesses or high assets, require the skill of an experienced attorney. Our divorce lawyers have years of experience in business divorce. For answers to your questions or to speak with an attorney about your divorce, give us a call at 214-430-4440 or send us a message.