One of the most complicated – and often contentious – aspects of a Texas Divorce is the division of marital property. When part of that marital property is a family business, things become more complicated still. Fortunately, there are some straightforward approaches that can help you navigate this often-rocky terrain.
Your Marital Property
If you are facing a divorce, you are going to be dividing your marital assets in a manner that is deemed just and right by the court, which basically means in a manner that is fair given the circumstances. Typically, a family's most valuable asset is their home, but if you own a family business, this very likely trumps your home's value. Often, however, it is complicated.
All of the following apply to marital property:
- Anything you acquired together as a married couple is generally marital property, including a family business.
- Anything you brought into the marriage as separate property – and kept separate – usually remains that spouse's separate property. If one of you brought the business in question into the marriage with you, but it was intermingled with your marital property, it can complicate the matter still further.
- Any gifts or inheritances that either of you acquired in your name alone during the course of your marriage remain your separate property.
If You Are a Wife and Husband Team
If you and your spouse run the business in question together, dividing the asset in your divorce is going to be tricky. Often times, such a business is the sole source of financial support for the entire family, which typically means that selling it in the course of your divorce will be financially detrimental for all involved.
Some couples – even in less than amicable divorces – continue to run these businesses together by adhering to the same work roles that they always have and committing these roles to writing. Other couples divide their roles in a manner that allows them to keep running the business together without having to physically work together. For example, one spouse might do the books behind the scenes while the other has more of an active presence. The fact is that, if you cannot find a workaround on this one, one of you will likely need to buy the other out, which leaves the spouse who sold his or her share of the business without a source of income and probably at a disadvantage.
If One of You Runs the Business
If your divorce involves a business in which only one of you works, but that still supports the entire family, it generally makes the most sense for the person running the business to continue to do so post-divorce. This usually means you will need to get creative regarding buying the other spouse out – without having to sell the business in the process.
An Experienced Attorney Can Help
The division of marital property is complicated, and owning a business makes it more so. Brett Pritchard at The Law Office of Brett H. Pritchard in Killeen has extensive experience helping divorcing business owners like you find paths forward that work for them. To learn more, please do not hesitate to contact or call us at 254-501-4040 today.