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What to do about a business in a divorce

When a Texas business owner gets a divorce, the other spouse may be able to claim an interest in half of the company. Most of the property that either person acquires during the marriage will be considered shared marital property; although, that does not necessarily mean a business will be split 50/50 between divorcing spouses. If the business was started before the marriage, the amount it has increased in value is usually the portion that's considered marital property.

The first step is to get the business appraised. This should be done by an experienced professional, and it involves far more than simply a look at the company's official books. In addition to equipment and other assets owned by the business, there are intangibles to be considered, such as the reputation as the company, as well as whether there are handshake loans or other informal deals conducted that affect the company's worth. In some cases, a business owner could take steps to inflate or hide the company's true value.

Once an accurate appraisal is in place, the couple must decide whether they will keep the business, sell it or split it. There may be an agreement in place, particularly in a partnership, that addresses what will happen if an owner gets a divorce.

Even a prenuptial agreement that addresses what happens to a business in case of divorce is not airtight. If it has been prepared incorrectly or it appears the other spouse was coerced into signing, the prenup could be thrown out. Couples who must negotiate a divorce agreement regarding a business may want to consider having one exchange an asset for an interest in the business. If they decide to continue running it together, they may want to create an agreement about what to do if one later wants to leave.

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Law Office of B. Diane Heindel, P.C.
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Law Office of B. Diane Heindel, P.C.