For personalized, compassionate guidance through the divorce process or other family law matters, call Morris | Richmond Law Firm, PLLC at 281-532-5465.

Client-Focused Attorneys Providing Counsel, Advice And The Tools You Need To Resolve Your Family’s Legal Issues

Client-Focused Attorneys Providing Counsel, Advice And The Tools You Need To Resolve Your Family’s Legal Issues

How divorce can affect your business

Divorce has a tremendous impact on all aspects of life for Texas residents. One of the areas where it can have a massively detrimental effect is your business. Even if your divorce is uncontested, your soon-to-be ex-spouse may have a claim on what you own, including your business. What can you do to protect it?

Texas is a community property state

Texas requires couples to equally split all assets acquired during the marriage as a community property state. Equal doesn’t always mean 50% during divorce negotiations. Rather, it means what the courts deem fair according to the circumstances presented by each spouse. Profits accumulated during the marriage are considered community property. If you want to retain control of your business, you may have to give up significant assets that will impact other areas of your life.

Divorce could also affect the daily operations of your company. Negotiations can often become heated during negotiations leaving you distracted. Not giving your company the attention it needs could put it in jeopardy. Another complication occurs if your spouse is involved with the business. Although some divorced couples continue to work with one another after a split, the tension may be too much, so one of you may want to sell your stake in the business.

What can I do to protect my business?

Although no one goes into a marriage to eventually divorce, you can take several steps to protect your business. Drafting a a post-nuptial shortly after the wedding will define what happens to your business in case of a split. These documents can outline if the company is part of marital property during divorce negotiations or if any appreciation of assets will be part of the deal.

Other steps you can take include keeping your finances separate from your spouse’s. You can also pay yourself a good salary, put the business into a trust, or take out an insurance policy. Working with a financial advisor may provide the best option for your circumstances.