Divorce is often a difficult process, highly charged with emotions and weighty decisions such as splitting assets and deciding on custody agreements. However, if a business is in the mix, this can also present its own set of complications. These situations may require careful navigation to resolve, and an experienced Pearland divorce lawyer can help protect your interests and provide the best and most amicable outcome possible.
With the aid of Terry & Roberts, you can be confident that you are receiving sound counsel designed to protect and prioritize your goals throughout the process. Our attorneys are skilled negotiators who will fight to get you a fair division and settlement that meets your expectations. You are our top priority, and we provide you with the highest level of service at every stage of the divorce proceedings.
The Role of Texas Community Property Laws During a Divorce
Texas is one of the few states that implement community property laws. According to these laws, every asset and debt a couple acquires during their union is subject to an equitable division during a divorce. If an item or piece of property was gained by either spouse prior to the marriage, then it is generally excluded from consideration when assets are divided up. Texas Family Code, Chapter 3, and Texas Family Code, Chapter 7 provide specific direction on what and how assets and debts are to be divided and disbursed upon the dissolution of marriage.
In light of these laws, it is important to note that a business may also fall under the jurisdiction of community property laws depending on when it was begun.
In the event that one of the spouses owned a business prior to marriage, it is considered to be separate property and is, therefore, an exclusion. However, if the couple started or acquired a business during their marriage, then it will be divided up according to Texas’ community property rules.
Determining the Value of a Business During a Divorce
Once it has been identified that the business in question is considered commercial property, the next step is to determine the value of the business. This step is crucial for ensuring the most equitable division of this asset. A business valuation is often handled by a certified, independent outside party known as a business appraiser. They will take a few factors into consideration when determining your business’ value.
One of the first aspects the appraiser will consider is who owns the business and their level of involvement or ownership. If one spouse has a controlling share, this may carry more weight and can impact the outcome of who receives the business in the divorce. While still a significant factor, the value of the business may carry less weight in the divorce proceedings if both partners own it equally.
Another point of deliberation when valuing a business is the structure of the business itself. With multiple types of entities to choose from when building a business, each can significantly influence the outcome and value of the company. This is especially true when taking into account the various types of taxation that are associated with each business entity.
Finally, state law plays a significant role in how a business is valued. While these laws may vary by state, they outline what can be included in a valuation and how to determine the fair market value that is used for dividing the business’s assets and liabilities. They also dictate the role of business goodwill and reputation in the evaluation.
Steps to Take to Protect Your Business During Divorce Proceedings
If you are a business owner, protecting your company is an important consideration during a divorce. There are certain steps you can take to ensure that this asset is not at risk should you and your spouse choose to separate.
First, like many things in life, preventative measures go a long way toward avoiding a less-than-desirable outcome. The relationship between your marriage and business is no different.
Creating a prenuptial or postnuptial agreement early on can set clearly defined parameters around your business that must be followed if a divorce occurs. These agreements can outline what, if any, assets are split up. You can even specify what should be excluded from community property considerations.
Secondly, it is important to monitor and document business activity that could affect how your business is handled during your divorce. This could include taking steps to keep your business entity and finances separate from your personal life, creating a clear paper trail of all sales and purchases made in the name of your business, recognizing any joint efforts in the business, and considering buying out your spouse’s portion of the business if you want to retain control of it after the divorce is final.
Finally, it is in your best interest to hire a divorce attorney to represent you. They can provide counsel and advise you on specific ways to protect your business from the effects of divorce. This will give you the best chance at a favorable outcome because the strategies and actions taken will be tailored to your personal situation.
The Benefits of Hiring a Divorce Lawyer in Pearland, Texas
No matter how amicable the separation between you and your soon-to-be ex-spouse is, it is essential to hire a lawyer to handle your divorce — especially if you own a business or share one with your spouse. Your lawyer will not only guide you through the legal process, but they will also ensure that your voice is heard and taken seriously.
A large part of the divorce process is dividing up assets between you and your partner. While this stage can be made easier if a prenuptial or postnuptial agreement is in place, many people may not have one and must make these decisions as they move forward with dissolving their union. Regardless of which camp you fall into, you are likely to have questions along the way that only a lawyer can answer.
Your lawyer is also instrumental in helping you determine the type of property your business is considered under state law and, therefore, how it will be handled during your divorce. They will also help you negotiate terms that are amenable to you and your spouse, and help you navigate any obstacles as they arise. They will also work with you to develop a strategy for protecting your assets as much as possible during your divorce.
Terry & Roberts Protects Your Business Interests During a Divorce
When you have worked hard to build your business, Terry & Roberts helps ensure that your assets are not at risk when you go through a divorce with a business. We also work tirelessly to conduct your negotiations as peacefully as possible to reach a fair compromise and favorable outcome for both parties. When you need a Pearland divorce lawyer to navigate the complexities of divorce and asset divisions, we are here and ready to be your advocate. Contact us today to schedule a consultation and get the help you need.