If you own a business and know there’s a divorce in your future, then you may need to make some very difficult decisions if you hope to keep the business intact. This is especially true if you divorce in Texas.
In Texas, community property law requires divorcing spouses to divide their marital property equally, rather than allowing for more flexible “equitable” division, like many other states use. In short, if your business qualifies as marital property, then your spouse has as strong legal claim to half of the value that you own in it.
First, it is important to determine whether or not the business qualifies as marital property. If you had the foresight to create a prenuptial or post-nuptial agreement that protects your business specifically, then it is time to dust it off. Review it to make sure you understand the terms and can enforce them. Similarly, if you acquired the business prior to marrying your spouse, you may have grounds to claim that it should not qualify as marital property.
All of this grows much more complicated if your spouse assists you with the business in any way, or if you commingle your personal and business assets. If you hope to keep the business separate during your divorce, then it must also be financially separate. You must show that separation clearly in your business and personal financial records.
Protecting your rights throughout divorce requires clear vision and a strong strategy. Whereas marrying a partner is a very simple process, relatively speaking, divorce is rarely ever simple, even in the best circumstances. Make sure that you carefully assess what you need to prioritize and what you can sacrifice to keep your business together. That will help you chart a clear path to a better, more stable life on the other side, once your divorce finalizes.