Divorce has very little to recommend it. If you are facing a divorce and you are a business owner, however, it can complicate the already-complicated divorce process considerably. Fortunately, several tips can help you better navigate the path toward your divorce.
Tip 1: Consider a Post-Marital Agreement
If you came into your marriage with a business and no prenuptial agreement, you may want to consider executing a postnuptial agreement. Such an agreement can signify which property will remain you and your spouse’s separate property in the event of a divorce. If a divorce is already on the horizon, however, you have probably moved past the point where a postnuptial agreement could be useful. If, on the other hand, you are a married business owner, a postnuptial agreement can be an effective tool that need not be construed as an indictment of your marriage.
Tip 2: Act Quickly
Divorce is never a fun topic, and many people put off thinking about it for as long as they possibly can. This is never a great plan, but if you are a business owner, that is doubly true. Texas is a community property state, which means that all the assets you acquired during the course of your marriage are subject to just and right division between you and your spouse. Even if you brought your business with you into the marriage, any growth, increased revenue, increased income, bonuses, or other financial upticks are considered community property. The fact is that owning a business complicates your divorce considerably.
Tip 3: Keep Accurate and Precise Records
Running a business is a lot of work, and keeping your books organized is an important component of that work. When complicated property, such as a business, is contested during a divorce, successful settlement is very likely to hinge upon you having kept excellent records. When you keep your records up to date and exact, they tell a financial story that is difficult to refute.
Tip 4: Do Not Intermingle Business and Personal Expenses
It is not uncommon for business owners to pay for their phones, vehicles, meals, even mortgages (if the business is home-based) through their businesses – and often this is legitimate. If you are going through a divorce, however, this practice can work against you. Keeping your business expenses and personal expenses carefully separated will help to keep your divorce financials clean.