What will happen to my business during a divorce?
If you are a small business owner who thinks that a divorce is in your future, you are probably asking yourself this question.
Maybe you never gave much thought to what would happen to your business if you and your spouse got divorced, but the scary reality is that if don’t have a prenuptial or post-nuptial agreement in place, your business could be in jeopardy.
Your spouse may be entitled to as much as half of your business in the divorce settlement, even if he or she had a very small role in getting it off the ground.
That’s because all property that is acquired during the marriage (including a business and business revenue) is considered community property and subject to division during Texas divorce. You will need an experienced divorce lawyer on your side to protect your business and your future.
One of the very first things your attorney will do is determine whether the business is, in fact, community property. In many cases, a portion of the business may be community property, but another portion may be separate property and not subject to division.
For example, if you used an inheritance from a family member to cover the business’ startup costs, part of the business may be separate property in nature. The same is true if you invested savings that you accumulated before you were married into the business.
If it turns out that your spouse is entitled to a share of the business, you will need your attorney’s help going through your settlement options. One option may be to buy out your spouse’s interest in the business with other community property or by making payments to your spouse over time.
However, in order for your business to stay afloat you will need effective counsel. If you have found yourself in this situation, our firm can help. Read more about how we assist clients with complex marital estates on our website.