Every divorcing couple faces their share of difficulties, but if you own a business, things are that much more complicated. Every divorce is as unique to its own circumstances and to the couple involved, but there are some basics related to owning a business that can help you understand how best to proceed.
Is Your Business Marital Property?
In a Texas divorce, your marital property will be divided in a manner that is deemed just and right, and the impetus behind this is to divide things fairly rather than evenly. Marital property is generally that property that the two of you acquired during the course of your marriage. Therefore, if one or both of you began the business in question during your marriage, it is likely marital property. The burden of proving that an asset such as a business is separate property is on the spouse who makes the claim.
The Business Valuation
Putting a meaningful value on a business can be very difficult and can easily become a sticking point in your divorce. Each business must be evaluated on its own unique merits, and the process is usually exacting. If you and your divorcing spouse can come to a mutually acceptable decision regarding who will conduct the valuation, you can move forward with the outcome of that valuation. If you and your divorcing spouse obtain your own separate valuations, the outcomes should be in fairly close alignment. If they are not, however, the court will make its own determination based on the valuations you make available. This can be a complicated process that requires very careful attention.
Dividing Your Business
It is likely not going to be possible to literally divide your business between the two of you, so you will need to find a way forward that adequately compensates both of you for your ownership. The court is not generally inclined to decimate a prospering business by chopping up its very structure in divorce. As such, there are different approaches the court may take to reasonably divide a business that is deemed marital property, for example:
- Awarding the business in its entirety to one spouse (generally the spouse who is more involved in running the business) while awarding the other spouse property and/or other assets that offset the value of the business.
- Requiring the spouse who is awarded the business to buy out the other spouse’s interest in the marital property via structured payments.
- Requiring the couple to sell the business and to split the proceeds in a manner deemed just and right by the court.
Owning a Business Complicates Divorce: Work Closely with an Experienced Attorney
If your divorce involves a business, you need the professional legal counsel of a dedicated Killeen divorce attorney on your side. Brett Pritchard at The Law Office of Brett H. Pritchard in Killeen, Texas, is just such an attorney. Mr. Pritchard has successfully helped many clients like you obtain divorce terms that protect their best interests. Our skilled legal team is here to answer your questions, so please do not hesitate to contact or call us at 254-501-4040 today.