The economic aspects of a divorce can be quite divisive for separating spouses. For many Texas couples, financial disagreements are what led to the divorce in the first place. If one or both partners own a business, the property division process can be even more complicated. Factors such as whether the business was started before or after the marriage and how much growth the business experienced during the marriage are relevant issues in determining how the assets will be handled.
An initial consideration is that Texas is a community property state. This means that assets acquired during the marriage are generally considered marital property to be split evenly. If a business was in existence before a marriage, and all transactions were kept separate and apart from all personal transactions, there could be an argument that the business is truly separate property and therefore not subject to property division. Seldom, however, are the lines of separation so precisely maintained.
The parties can agree to maintain the business as the owner spouse’s separate property through either a prenuptial or postnuptial agreement. However, it is important to ensure that both parties have been adequately informed of their legal rights and understand what is at stake. This is especially true of the non-owner spouse, who might be less sophisticated in business matters than the owner spouse. Of course, it may also be possible for the owner spouse to retain the business completely and the non-owner spouse to receive other property of equal value.
High-asset divorces often involve disputes concerning complex asset division. An experienced family law attorney can provide guidance to a client on how best to proceed.