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Specialty tag(s): Complex Property, Characterization of Separate and Community Property, Property Division, Divorce for Business Owners, Divorce

What Happens to the Assets of a Business in a Divorce?

Angel J. Berbarie | April 2, 2024

When a business owner gets divorced, their interest in the business may be divided with their spouse. However, what would be divided is the business itself, not its assets. But the specifics of what happens to a business or its assets in a divorce can vary based on the unique circumstances of a specific case, which is why it’s important to seek guidance from a knowledgeable divorce attorney.

Will the Business Always Be Divided Up?

In most cases, if you own a business, it will be divided in a divorce, but that’s not always true. First, you’ll need to determine whether the business should be characterized as separate or community property. If it’s separate property, you’ll keep the business. If it’s community property, its value will need to be split with your spouse.

Can the Court Divide the Assets of the Business?

Usually, the assets of a business are not divided in a divorce, but there is one key exception. If the spouse who doesn’t own the business can prove that the business is essentially their spouse’s alter ego, with the finances of the business being indistinct from their personal finances, then the court can divide up the assets of the business.

If you own a business and are facing divorce, it’s crucial to start pulling together financial documentation as soon as possible, as you’ll need it for the business valuation. You’ll also need to hire an experienced lawyer who can protect your legal rights and help you secure the best possible outcome for your case. The divorce attorneys at Goranson Bain Ausley stand ready to assist business owners in Texas, and we’ll work hard to help you achieve the results you deserve. Contact us today to get started.