Anyone who lives in Texas for even a short while can tell you we do things a bit differently here. While many of the things that make Texas unique are worth praising, the laws that govern divorce often make the process more difficult and complicated than it might be in other states.
Unlike almost all of the other states in the union, Texas uses community property laws to determine how a couple divorces. This requires that each spouse receive an equal share of all marital property.
This may not seem too complicated for couples who have relatively simple assets, but for those with complex assets, it can turn into a nightmare without careful planning. This is particularly true when one spouse owns a business, because businesses can count as marital property.
If you own a business and are also facing divorce, you must examine your priorities. If your divorce does not resolve favorably, your business may not survive. Make sure that you build a strong legal strategy to keep your business and your rights protected, if you believe that saving your business is important to your future and the futures of those who depend on it.
Understand the risks
Many factors may affect how your divorce impacts your business. If you took precautions before your marriage and created a prenuptial agreement protecting your business, you should still review the agreement carefully. If it does not hold up to scrutiny, your spouse may urge the court to disregard the terms, or a court may determine that the agreement is invalid.
If your spouse has little or no involvement in the business, you may have grounds to argue that it is not marital property. However, this is very difficult to achieve. It requires that you keep impeccable records that show clear separation between your personal and business finances. It also indicates that you bring home standard income for your industry. If you underpay yourself, your spouse may claim that you are withholding income from the household.
If you have employees, your personal difficulties could become their professional problem. Dividing up a business during divorce often means selling it or dissolving it, unless you can come up with fair compensation for your spouse. This may mean offering them other assets to make up the difference or working out a payment plan that keeps your business afloat and compensates your spouse fairly for their share of its value.
Begin building your strategy now
Without a strong divorce strategy, you stand to lose a great deal, possibly sinking your business altogether. If you hope to keep your business intact after your divorce finalizes, you must build a strong strategy as soon as possible. Protect your future and your rights now, so you can focus on the priorities that matter while you work through this difficult season and move on to the next.