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How Divorce Impacts Small Business Owners in Texas

For small business owners, a divorce may involve valuable business interests, income, debts, and other financial concerns. Our Fort Worth divorce lawyers understand that divorce can involve far more than dividing household belongings. The Law Office of Kyle Whitaker helps business owners understand how Texas property division laws can affect their companies and personal finances.

How Is a Business Treated During a Texas Divorce?

A business can be considered part of the marital estate in a Texas divorce. A business started during the marriage may be considered community property. A business established before marriage may qualify as separate property. However, the business can still raise complicated financial issues during the divorce.

For example, one spouse may have owned a business before the marriage, making the business itself separate property. However, the other spouse may have helped with bookkeeping, managed employees, handled administrative work, or used marital income to pay business expenses. 

These contributions may create financial issues that the court must consider when dividing the marital estate. A spouse who does not own the business may have a claim for reimbursement or another financial interest depending on the circumstances.

Business Valuation During Divorce

A business is valued during divorce to determine how much it is worth so the court can fairly divide the marital property. Determining the value of a business may be one of the most complicated aspects of a divorce involving a business owner. A company can have value based on its:

In some cases, financial professionals may also be involved in determining the value of a business. 

Can a Spouse Keep the Business After Divorce?

A spouse may be able to continue operating a business after the divorce. This does not automatically mean the other spouse loses their financial interest in the company.

There are several ways spouses may handle a business during a divorce. One spouse may keep the business and pay the other spouse for their share of its value. The spouse keeping the business may use other marital assets, such as money or property, to offset the other spouse’s interest.

In some cases, the spouses may sell the business and divide the proceeds. This may be an option when neither spouse wants to continue operating the company or when selling the business provides a simpler way to divide its value.

The spouses may also continue owning the business together after the divorce. However, this can create ongoing financial and personal complications. The best option depends on the value of the business, each spouse’s financial interests, and whether the spouses can agree on how to handle the company.

Seek Help From a Knowledgeable Divorce Lawyer in Fort Worth, TX

Divorce can create significant financial concerns for small business owners. For assistance with a divorce involving a small business, contact our firm today online or by calling 817-332-7703. Our divorce lawyers in Fort Worth are ready to discuss your situation and explain how the Law Office of Kyle Whitaker can help.