How to Protect Your Business From a Divorce in Texas
Going through a divorce can be a harrowing personal experience, but it also has the potential to affect your finances—potentially for the rest of your life. Your spouse may be able to go after business assets, especially if they have helped you build your business or you have commingled assets. If you and your partner are co-owners of the business, the business may be considered marital property, and you’ll have to divide up your business just like any other asset. Here’s how you can protect your business if you’re going through a Texas divorce.
Hire a Lawyer as Early as Possible
Business ownership complicates a divorce. If your spouse is a co-owner or employee of the business, they may be entitled to a share of the company. They’ll also have access to business documents and contacts that could potentially be used not only in your divorce case, but also to undermine the performance of your business. Even if your spouse has no involvement in your business, divorce can put your company in a precarious position, especially if your business is not well-structured. For example, if you do not pay yourself a salary or your salary is not consistent with market norms, your ex could assert that you have more assets than you claim, entitling them to a larger share or more child support.
Don’t even think about managing these complexities on your own. You need to talk to a lawyer about your specific situation, since every divorce and every business is different. If possible, talk to a lawyer several months before filing, because your lawyer can advise you about strategies for getting your business ready for the perils of divorce.
Get Your Business Ready
If you haven’t yet filed, there are plenty of things you can do to prepare your business for divorce:
- Ensure your business is a registered entity.
- Treat your business as a separate entity. Don’t commingle assets or run personal expenses through your business.
- Pay yourself a reasonable salary based on what the market will bear.
Get a Business Valuation
A business valuation provides accurate information about the current value of your business. This can help you prepare to negotiate over other assets. It can also serve as a counterweight if your ex claims your business is worth much more—or much less—than you claim. Armed with this valuation, it will be easier to sell your business and split the proceeds, offer other assets in return for keeping the business, or show that the business is not marital property.
Keep Good Records and Don’t Commingle Assets
Good records can save you when a divorce threatens your business. They support your claims about the value of your business and your salary. They also show that your business is a separate entity, which is extremely important if you claim that the business is not a marital asset.
The Wynne Law Firm specializes in protecting businesses against the storms of divorce. To learn more about how we can help you and your business, give us a call today!
Contact Us Today To Meet With A Family Law Attorney
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FORT WORTH OFFICE
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FORT WORTH, TX 76102
FORT WORTH OFFICE 2630 WEST FREEWAY, SUITE 218 FORT WORTH, TX 76102
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