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Business owners and divorce

| Apr 24, 2018 | Property Division |

If a couple in Texas is getting a divorce and one of them owns a business, there may be several complicated issues to consider in the process of property division. The business will first need to be valued, and there are several different ways of doing this. The value might be based on the income, the market or the asset. This process may involve not just looking over records but touring the facilities and interviewing management. If one person brought the business into the marriage, the valuation might need to be based on the appreciation of the business since the marriage.

State law will dictate how the value of the business and future earnings will be balanced against support payments. In some cases, a business owner might try to hide the value of the business from the other spouse. This might include trying to indicate that there are fewer assets or higher expenses than actually exist.

A business may be the most valuable asset in a divorce. Therefore, getting an accurate valuation can be critical to ensuring a fair distribution of marital assets.

In a community property state like Texas, most assets acquired by either person during the marriage are considered shared property, and this may be true for a business as well. However, the business may have provisions in place that detail what happens if one of the owners gets a divorce. The couple might also have signed a prenuptial agreement although this could be challenged if one person had insufficient legal counsel or there are issues with the document itself. Other aspects of property division that people might need to negotiate include dividing a home and a retirement account. In some cases, a couple might want to make an arrangement in which each takes specific assets instead of dividing them equally.

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