Divorce happens and it happens to everyone. Doctors, lawyers and teachers -- to name only a few -- no profession is immune to the hardships of marriage that often lead to divorce. For some, though, the stakes are often higher. This includes not only high-wage earners, but also business owners, as many worry about the future of their business and if their ex-spouse will end up getting more than their fair share.
If you are a business owner in Texas and plan to file for divorce, or you have reason to believe your spouse will, now is the time to act when it comes to figuring out property division. At Katie L. Lewis, P.C. we frequently represent business owners in divorce. We firmly believe the more preparation, the better and encourage business owners to reach out to an attorney as soon as they realize divorce is on the horizon.
Business owners find themselves in unique situations. Below are some of the more frequent questions.
Is my business subject to property division in divorce?
Texas is a community property state. What this means is that typically all property accrued during the time of marriage is considered marital property and is subject to division in divorce. For a business owner, this means that without a prenuptial agreement - or shareholder, partnership or operating agreement previously in place -- the business is something that will most likely be considered marital property.
What is important to remember is that this does not mean that one spouse needs to give everything up, or give up their dreams. Rather, you will just want to bring all documentation regarding the business, its assets and other assets -- such as retirement funds, real estate and other investments -- to an attorney to start having discussions on what property division as a whole could end up looking like.
Is the valuation for divorce different from valuation for selling purposes?
Quite often, a business owner will come in saying he or she knows the exact value of their business due to an evaluation that was done prior for possible selling purposes. However, know this is not the same as a valuation for property division in divorce. Rather, the process for protecting one's business and quantifying assets for divorce is different.
What can I do to best protect my business?
When it comes to figuring out and dividing the assets of a business, one does not want to try to go at divorce alone. Nor, should anyone feel pressured to accept an offer without fully realizing its implications. There is simply too much at stake. An attorney will be able to examine the specifics of your business and your divorce situation and work with experts in the field to make sure that all marital and separate property is properly traced from the very beginning.