If you are a Texas business owner considering divorce, you might wonder how the state’s laws could impact your company.
Learning about the division of assets and community property law in Texas can be helpful as you explore your options. Additionally, there are steps you can take to protect your business during divorce.
Community property and businesses
Texas is a community property state, which means that most assets obtained by a couple during marriage belong to both parties. When a couple divorces, all community property is subject to division. If you owned your business before marriage, it could remain yours after divorce. However, the company might be community property if your ownership started after you married.
You could buy out your spouse with other assets to keep your business. Sometimes, partners who get along can continue to own a business together after divorcing. In other cases, divorce might lead you to sell your business and split the money with your spouse in the settlement.
Protecting your assets in divorce
Although community property law can make divorce challenging for Texas business owners, there are steps you can take to prepare. First, consider seeking a professional valuation of your company. This can help you determine how to divide property accurately and fairly with your ex-spouse. You should gather crucial documentation and financial records, including bank statements and tax returns. Discussing your assets fully and openly with financial and legal professionals can be beneficial. You can also seek mediation with your ex-spouse to separate your property in a way that benefits both parties and reduces financial penalties, such as fees and taxes.
Community property can complicate divorce for business owners in Texas. However, you can be proactive as your approach your divorce and protect your stake in your company.