Business Owners and Divorce
Protect your business interests when going through a divorce.
Business owners have a unique set of circumstances when entering into a divorce. First and foremost, as a business owner, you will want to protect your business and your business interests in order to see it grow and survive well after your divorce. This means making sure to continually manage your business. Going through a divorce can feel like your life has been turned upside down. Regardless, your business still needs attention. Outsource management when you can and be sure that your employees remain focused as well. If you and your spouse both work at your business, consider putting an agreement in place which outlines rights and responsibilities regarding the ownership and management of the business.
During the divorce process, a business will be treated just as any other asset. Texas is a community property state and this means that each spouse owns half of what belongs to the other spouse. If your business is considered community property, then it is considered to be jointly owned by you and your spouse and will be equitably divided in the divorce. If your business is deemed separate property, it is considered to be owned only by you. In some cases, a business may be considered part separate property and part community property.
If the business is considered community property, you will owe your spouse some portion of the business. There three main ways this:
- Business buy out : You may have the option of buying out your spouse’s ownership interests in the business. This option is usually best when you work in the day to day operation of the business and your spouse does not have any involvement in the business.
- Sale: The business may also be sold and the proceeds of the sale would be divided. In some cases, this is a last resort when two spouses cannot reach any other agreement on how to divide the business.
- Co-ownership: Some spouses agree to continue co-ownership of the business. This option can be particularly complicated and must be handled with care to ensure the longevity of your business. Continuing to own a business with your former spouse after a divorce will require careful consideration.
Business owners put so much of themselves into seeing their work grow and succeed. Don’t let divorce prevent you from continued success. The dedicated Fort Worth divorce attorneys at the Law Office of Kyle Whitaker help protect your business interests throughout the divorce process. Protect the business you have built and contact us today by calling (817) 332-7703 or contact us online.