How entrepreneurs could protect themselves during a divorce

On Behalf of | Dec 28, 2018 | High Asset Divorce

When entrepreneurs in Texas get divorced, they face a unique set of financial challenges and concerns. Whether a divorcing entrepreneur is a sole proprietor or shares a business with his or her spouse, he or she needs to have a clear idea of the value of his or her company.

Depending on the line of work a person is in, his or her business could be a larger asset than his or her home. For this reason, if a soon to be ex-spouse wants a piece of the business during the divorce settlement, an entrepreneur needs to keep his or her wits about him or her. He or she needs to clearly understand the future growth potential of the business, how much debt it has as well as its current and future liabilities. This is especially important when spouses are partners in the business. Knowing the accurate value of a business makes it easier to determine how much to ask for or how much to pay during a buyout.

Most entrepreneurs are deeply emotionally attached to their companies. When something attacks their businesses, they take it personally. This can make untangling one’s finances from his or her partner’s, especially when it comes to divvying up a business, a tension-filled activity. It is not the time to allow emotions or sentimentality to rule. During this phase of the divorce, knowledge is power, and precision is essential.

Just because a couple is divorcing does not mean that their business ceases to function. Clients do not care about divorce proceedings, and neither do bill collectors or employees. An appraiser could be beneficial when evaluating the business and predicting its growth over the next few years.

Entrepreneurs who are going through a high-asset divorce could benefit from the services of a family law attorney. A lawyer may be able to provide advice to their clients on dividing shared accounts and property division laws as well as evaluate their assets. He or she may offer practical suggestions on other challenges that could arise during the divorce process.