Whether you worked long, hard hours for several decades to build a successful business in Texas or just recently began your career as a first-time entrepreneur, you’re likely to be very proud of your accomplishments and celebrate all the times you overcame challenges along the way. It’s only natural you might worry about losing your business if you and your spouse decide to divorce, especially if your particular situation is a lot less than amicable.
Hopefully, you have a solid prenuptial agreement in place or at least made sure you and your intended spouse were on the same page regarding business assets before you tied the knot. Even if neither of these scenarios pertains to your situations, there still may not be cause for panic.
These tips may help protect your business
Texas happens to be one of only nine community property states in the nation. This is a significant fact that may strongly impact business owners like you. Since community property states presumably can divide all marital property 50/50 in divorce, this includes your business assets unless there’s an existing written agreement stating otherwise. Following is a list of ideas that have helped others protect their hard-earned business interests in divorce:
- Nothing is set in stone where pre-nups are concerned: If you’re not someone preparing for divorce because you haven’t even married yet, then considering filing a prenuptial agreement to divorce-proof your business may be extremely beneficial. There’s no set rule for what you may or may not include in your plan because it’s a customizable process that you and your soon-to-be spouse can design according to your own needs and long-term business goals.
- Post nuptial is better than no nuptials: If the person you planned to marry would not sign a prenuptial contract, and you were worried that pushing the issue might ruin your chances to wed altogether, it’s not too late to broach the topic again after the wedding. Whether one, two or ten years later, you can always sign a written agreement protecting business interests.
- Trade is fair in love and divorce: Perhaps you and your spouse have traded things during marriage, such as Brussel sprouts for chicken drumsticks or a foot massage for a back rub. Retaining your business assets might be possible if you offer to trade other assets in divorce, such as a vehicle, a home or other property. In a community property state, the trade would have to be 50/50, meaning the value of the assets you offer must equal the value of the assets you wish to keep.
The court will require a business valuation in order to make informed decisions regarding asset division in your divorce. The point is, there are generally several ways to approach the topic when trying to protect your interests. There’s no reason you should have to lose the business you worked so hard to build just because your marriage didn’t work out.
Other Texas business owners in the past found ways to overcome such obstacles by acting on the guidance of an experienced Board-Certified expert family law attorney. Knowing what you own and what state law says about property division in divorce are key factors to making sure the “owned by” sign stays the same on your business as you move on to new experiences after the emancipating Joy of Divorce.