Specialty tag(s): Divorce for Business Owners, Divorce
Jonathan James | December 19, 2023
Divorce is stressful, and that’s even truer when you own a business. You may worry about how the divorce will affect the future of your business and, as Texas is a community property state, there can be a lot of uncertainty about what will happen and how property could be divided. Most marital property is generally considered to be equally owned by both spouses and subject to division during a divorce. This is especially worrisome for those who have worked hard and want to retain ownership of their business in the event of a divorce. Learning how you can protect your business from being considered marital property during a divorce starts with understanding the ins and outs of separate and community property.
Business owners pursuing a divorce in Texas may find that their business is already protected as separate property, rather than community property. Community property is divided during a divorce, but separate property is not. The Texas Family Code states that community property is any property that either spouse acquired during the marriage. Separate property, however, is classified as any property owned by a spouse before marriage, received as a gift or inheritance during the marriage, or acquired from a personal injury lawsuit during the marriage. These differences mean that if you owned the business before the marriage or inherited the business during the marriage, it will not be divided in a Texas divorce, as long as you didn’t commingle your business assets with jointly owned assets.
Even if your business is not automatically considered separate property, there are a few different legal strategies that you can use to protect your business from being considered marital property.
You can protect your business assets from being considered community property by addressing those assets in a postnuptial agreement. These agreements work similarly to prenuptial agreements, except that they are created after the marriage has started. A divorce lawyer can help you draft post- and prenuptial agreements and lay out terms that protect your business assets from division during a divorce.
A Texas Marital Settlement Agreement allows spouses to decide for themselves how they want to split up their assets. However, working out a settlement agreement generally requires you to relinquish other assets to your spouse to protect your business and offer an agreement that is acceptable to both parties.
Contacting an experienced divorce lawyer is one of the first things anyone who is facing a divorce should do. Attorneys experienced in handling divorces involving businesses offer invaluable insight into the proceedings and well-informed advice on how best to protect your business assets and your future.
What Steps Can I Take to Distinguish My Business as Separate Property?
Goranson Bain Ausley is the largest family law firm in Texas and our dedicated team of skilled divorce lawyers is experienced in handling business asset division and many other complexities that may impact a divorce settlement, including business valuation. Our attorneys work hard to help you navigate the intricacies of divorce as a business owner, protecting your business and securing your future. Contact us today to schedule a legal consultation and find out how to best protect your business interests.
Jonathan James is Board-Certified by the Texas Board of Legal Specialization in family law and is a member of the State Bar of Texas. He is trained in Collaborative Divorce and has been named a Super Lawyers Rising Star, 2019-2022 and Best Lawyer 2020-2021 and 2023 by The Best Lawyers in America.
If you need help with your family law matter, please contact Jonathan James at 214-903-4801.
Our attorneys are experienced in all aspects of family law and will guide you through each step of the process, ensuring you have the information you need to make wise decisions and prepare for the future.
At Goranson Bain Ausley, we strive to deliver clarity about what comes next and confidence that you and your family’s future are more secure. Contact our team and discover how we can help you.
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