Couples in Texas who decide to get a divorce will need to negotiate how to fairly divide their assets. While this is an already delicate endeavor, the process can become more complicated and take longer when there is a family business involved.
During divorce, couples who own a business have three options about how to handle it. The first and seemingly easier option is for both to remain as owners involved in the business. However, divorce also often comes with a lot of emotional distress, so it is not easy for many couples to continue working together amicably. The second option is to sell the business and then divide the proceeds evenly. If couples choose to go with this option, they can individually decide what to do with their portion of the money. However, selling the business can take a long time, which means the divorce process could last longer, and the couple will need to decide how to handle the business until it sells.
The third option involves one spouse buying out the other spouse and keeping the business. In this case, the couple would first get the business appraised so that they know the actual value. A straightforward buyout would also save the couple on taxes as the sale is considered a property transfer incident to divorce. If the buying spouse does not have liquid assets to cover the full cost that they need to pay to buy out their ex, they can also structure a settlement over time.
For individuals who are dealing with this situation in a divorce, the guidance of a family law lawyer may be valuable to help them figure out the best option. A lawyer may provide assistance in figuring out the financial choices that need to be made regarding property division in a divorce.