Deciding to end a marriage is always challenging. But when a couple owns a business together, the complexities multiply. In Texas, divorcing couples often find themselves facing the task of separating both their personal lives and their business lives. If you and your spouse are navigating shared business ownership in a Texas divorce, here’s what you should know.
Is Your Texas Business Marital Property or a Separate Asset?
Texas is a community property state. That means assets and debts acquired during the marriage are generally considered to be the property of both spouses. The law requires that spouses divide these assets and debts equally.
When a business was started or grown during the marriage, it can be argued that the business is community property, too. However, community property laws don’t always apply. In some cases, a business can be classified as a separate asset rather than community property. Examples of businesses that are separate assets may include:
- The business interest is protected by a prenuptial agreement, which is created before the marriage and indicates what will happen to the assets upon divorce.
- The business was received by one spouse through inheritance, a will or trust fund.
- The business was built up prior to the marriage or after the spouses were legally separated and not living together.
This isn’t always as clear cut as you may think. In many cases, the business was started before the marriage, but grew because of the effort and investment of both spouses during the marriage. Which part of the business, if any, is a separate asset? Which is community property?
Determining the true value of the business is one of the primary challenges in Texas divorces involving business interests. Shared business ownership often means intertwined financial affairs, and it can be challenging to unravel joint accounts, divide business debts and get a true sense of the numbers. Our Arlington, Texas, law firm partners with highly qualified business valuation experts in complex matters.
Moving Forward Amicably as Co-Owners After a Divorce
It doesn’t always happen, but it’s worth mentioning that divorce doesn’t always end a business relationship. Some couples end their marriage but continue to run successful businesses together. If you’re considering sharing your business after a divorce, it’s critical that you partner with an attorney who has experience in both family law and business matters.
Your attorney can guide you through the process so your interests are protected every step of the way. This doesn’t mean taking an adversarial approach. It simply means laying the foundation for a successful path forward by making sure you’re treated fairly.
Protect Your Interests. Seek Guidance in Your Texas Divorce.
Divorce, especially when there’s a business involved, can be a challenging and emotional process. Seeking guidance from the experienced lawyers at the Schneider Law Firm in Arlington, Texas, is essential to protecting your interests. Schedule a free consultation today by calling 817-799-7125 or send us a message.