The end of a marriage can be a significantly difficult period in your life. If you and your spouse have a considerable amount of assets, the process can often be extremely complex and daunting. If you own a business together, it may account for a great deal of your wealth, and can often be difficult to divide. You may find that there are various important aspects to consider before proceeding into the divorce process in order to secure the future of your family business.
What protections are available for my family business?
So you are facing a divorce and worry what will happen to the business you worked so hard to build. You may want to protect the longevity of your enterprise, but you may be unsure of your options. Some of the most common means of protecting your business in the event of a divorce include the following:
- Prenuptial agreements: If you already owned the business before marriage, you may have a prenuptial agreement in place dictating what will happen to it in the event of divorce. Provided the document was properly prepared, it may be ironclad regardless of any state laws that may apply to your situation. However, this agreement must be written and executed before witnesses voluntarily on the part of both spouses, and must include an equitable portion for the spouse if the marriage is dissolved.
- Trusts: Perhaps your parents passed ownership in the business down to you. If they initiated a trust using stock in the business, your spouse has no right to this particular portion, provided the stock, or sale thereof, stays within the trust. While this may not protect the actual business itself, you will retain the trust after divorce, no matter how significant the amount may be.
- Remain as co-owners with your spouse: Attempting to maintain a working relationship with your spouse is an option that will allow the structure of your business to remain intact. If you consider this a viable choice, you may want to initiate a shareholder agreement with your spouse that will allow you to buy out business interests at a mutually agreeable price should the need arise.
- Sell your business: In some cases where there are no other options, you may choose to sell the business and split the profits. If your business is of considerable worth, it may account for the majority of your assets, leaving this as the only option.
- Borrow equity: If you wish to retain ownership, but simply do not have the currency available to buy out your spouse's business interests, you may look into acquiring a bank loan. Another option is to negotiate a property settlement in which you buy out your spouse by paying an agreeable amount with interest over time.
- Add a partner: Adding a business partner to the equation can also be beneficial. If you consider this an option, you may want to include a buy-sell agreement in the process.
Where can you turn for help and support?
The division of assets during many high asset divorces in Texas can present an individual with an overwhelming number of obstacles and can create significant tension between spouses. You may want to seek the assistance of an experienced attorney before proceeding into your divorce to make sure every aspect is covered. A knowledgeable, Texas family law attorney can evaluate your situation and advise you on the best course of action to protect the future of your family business and all other assets to which you are rightfully entitled.