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What Will Happen To My Business In My Divorce?

Most divorces have complex issues that require an experienced attorney to sort through. Spouses that share a business and get divorced often face the difficulty of wondering what to do next. As business owners and self-starters, we understand your business’s importance. While you are already ending your marriage, you don’t want to lose something else that you have worked so hard for.

Fortunately, you have options for preserving your rights in your business after your divorce. At Rose Sanders Family Law, our firm will fight to protect your interests so you can have the business future you want. Helping clients in Houston and throughout Harris County, our work as divorce attorneys are nationally recognized, including attorney Erica Rose being selected as a Rising Star by Super Lawyers.

Dividing Your Business Is Not Your Only Option

As Texas is a communal property state, all property obtained during a marriage is subject to division. Businesses are communal property acquired during your marriage unless explicitly designated as belonging to one spouse.

You and your spouse can decide what will happen to the business after your divorce. However, it can be challenging to negotiate this type of arrangement. Our lawyers will help explain your options so you can make the best decision for your future.

You have numerous options to consider, including:

  • Keep joint ownership of the business
  • Sell the business and divide the profits
  • One spouse keeps ownership and pays out the other spouse

If a business is part of your marital property, we will first perform a detailed valuation, often seeking the help of experts in the field, such as accountants and advisors. An accurate evaluation of the worth of your business is critical if a division is necessary. However, keeping your business and removing your spouse from ownership is possible. Our family law attorneys will review your case and work with you to develop a plan.

Common Questions We See About Divorce For Houston Business Owners

Here are a few common questions our Houston divorce lawyers see around businesses and divorce. Please keep in mind that each situation is unique, and these may not apply to your circumstances:

How will the divorce proceedings impact the ownership and operations of my business?

It can depend on your personal circumstances. For example, if your spouse co-owns the business with you, then one of you may consider buying the other out of their share of the business. If your spouse is just an employee or isn’t involved in the business at all, then you may not have to factor in ownership changes. However, you may have to find a replacement employee if you choose to terminate your employment relationship with them as well.

Our lawyers understand that the dynamics of your business and your marriage are unique. They can adapt their approach to help you find a workable solution that meets your specific needs.

Can my spouse claim a portion of my business, even if they weren’t directly involved in it?

It depends. Since Texas is a community property state, any asset accumulated during your marriage is considered community property and can be subject to division. If you started your business during your marriage or it accumulated significant value during your marriage, then your spouse may be entitled to a portion of its earnings.

If you started your business before you were married, then you may be able to prove that your business or any of its assets are subject to property division. Our attorneys at Rose Sanders Family Law can help build a strong case showing that your business is separate property. Call 713-766-9082 to get assistance with your divorce today.

What steps can I take to protect my business during a divorce?

Here are a few things you can do:

  • Make yourself the sole business owner: Make sure all business documents clearly show that you are the only owner and that ownership cannot be split or transferred to your spouse during a divorce.
  • Keep your expenses separate: Paying yourself a set salary out of your business funds can help you demonstrate your transparent and consistent income. Mixing business assets with personal assets could make a judge question how much you make and how much your business is actually worth.
  • Clearly document all other financial transactions: This is especially important if you started your business before you got married, as it can serve as proof that you used nonmarital funds to start and run your business. It’s also important to document any cash transactions.
  • If your spouse works at your business, pay them fairly: If your spouse assists you in any capacity with your business operations, make sure that you are paying them the going market rate for their services. If you don’t, they could advocate for a higher share of business earnings.

You dedicate a lot of time, energy and resources to run a profitable entity. The last thing you want is your divorce to hurt your operations.

How can I ensure that my business financial records get handled confidentially?

Keeping your business records private is crucial when navigating a divorce. A few things you can do to keep them private include having your spouse sign a nondisclosure agreement or pursue divorce mediation or arbitration. The main takeaway is that keeping your divorce out of court is one of the best ways to maintain privacy.

However, if you and your spouse can’t reach an agreement through these approaches, then our team can help you find other methods to help you maintain your privacy while maneuvering the ups and downs of your divorce.

How is the value of my business determined in the context of a divorce settlement?

Keeping your business records private is crucial when navigating a divorce. A few things you can do to keep them private include having your spouse sign a nondisclosure agreement or pursue divorce mediation or arbitration. The main takeaway is that keeping your divorce out of court is one of the best ways to maintain privacy.

However, if you and your spouse can’t reach an agreement through these approaches, then our team can help you find other methods to help you maintain your privacy while maneuvering the ups and downs of your divorce.

Helping You Find The Right Solution For Your Future

Whether you want to keep your business, work out joint ownership, or are wondering about other options, it is vital that you work with an attorney who understands the process and what it means to run your own company. Contact the team at Rose Sanders Family Law today at 713-766-9082 or online to schedule a consultation.