Few things complicate a business plan like marriage and divorce. While both may bring positive elements to a person’s life at various points, they also place the company in jeopardy. If an entrepreneur does not take precautions, he or she may end up in the midst of a business valuation in preparation for dividing a company built with much blood, sweat and tears.
Ideally a Texas business owner about to get married will request a prenuptial agreement from his or her intended. This will accomplish the goal of setting boundaries around the business to protect it from property division in case of divorce. The couple can make critical decisions about the business, such as how the entity and its assets will be dealt with in case of divorce or death and the roles each spouse will play in running the company.
Planning a prenuptial agreement will also reveal whether two future-spouses are able to communicate effectively about financial issues and other difficult topics. However, if a business owner fails to get a prenuptial agreement, the business may be fair game during a divorce. Even if the owner established the company before getting married, any profits earned during the marriage may be considered marital assets. At that point, the business may have to be valuated to determine how best to divide it.
Having an attorney with the resources to arrange a thorough business valuation will be crucial to an entrepreneur going through a divorce in Texas. Such an attorney will have forensic accountants and financial experts available to assist in determining the worth of the business beyond the value of its equipment. The business owner can also depend on an attorney who will work to protect his or her interests in the company.
Source: The Huffington Post, “Essential Steps To Divorce-Proof Your Business“, Lisa Helfend Meyer, Accessed on Feb. 17, 2017