If you're a business owner, you might be wondering about the impact your divorce could have on your enterprise. The outcome of your property division case—which may involve your business—can impact your personal financial stability for years or even decades post-divorce, and can also have ramifications for your company.
Understanding what to expect from the property division process in Texas can help you make the right decisions as you move forward with your divorce.
Does My Business Get Divided During Divorce?
In Texas, spouses must divide their marital property "equitably" during the property division process. Marital property is any property that both spouses acquire or contribute to in a meaningful way during the divorce.
Determining whether a business is marital property can be difficult, especially if you started the business before getting married. However, in many cases, the income that a business brings in post-marriage is considered community property and thus is subject to property division.
You and your spouse must determine the value of your business. This often involves each part working with a financial professional specializing in asset valuation, and then negotiating a value for the business.
Once you determine the value of the business, you have a few options:
- You can buy out your spouse. If the court determines that the business is community property, you may be able to pay your spouse their share of the business to retain ownership.
- You can request a buy out from your spouse. Alternatively, if your spouse wants the business, you can ask them to buy you out.
- You can co-own the business. If you and your spouse can still collaborate effectively, co-ownership may be an option.
- You can split the business. It may be possible to divide the enterprise into two separate entities.
- You can sell the business. It may also be possible for you to sell the company to an interested buyer.
- You can dissolve the business. Last but not least, if neither party can agree on how to handle the company, you may wish to dissolve it entirely.
It is worth noting that an "equitable" division of property does not mean a 50/50 split. If you are the business's primary owner and contribute far more to its value than your spouse, the court may award you the vast majority of the business, making it easier to buy out your spouse.
At the Law Offices of Frank E. Mann, we can help you protect your business and pursue an ideal outcome in your property division case.
Contact us online or via phone at (713) 903-8112 to schedule a consultation with our team.