Business owners going through a divorce are often concerned about the future of their business. To learn more about business owner divorce, continue reading and reach out to our experienced Montgomery County business valuation lawyer to discover how our firm can assist you with your upcoming divorce.
Can my spouse get part of my business in a divorce?
There are two types of property when it comes to divorce: community property and separate property. Although the rules are complicated, for the most part, separate property refers to the property that was acquired prior to the marriage, or to property that was acquired through inheritance or gifts. All other property owned by either spouse at the time of divorce is community property.
Your business will likely be considered community property if your business was started after you were married. This means that your business will likely be considered for property distribution
However, it is important to understand that your business may also be considered community property even if you started it before you were married, and even if your spouse was not directly involved in your business.
This is why you shouldn’t proceed without competent legal counsel on your side.
How is a business valued in a divorce?
Before a business is subjected to asset division, it must first be accurately valued. Often, parties will hire financial experts to assess a business. This value will be based on the following factors of your business:
After this value has been determined, the court will assess what portion of your business may go to your spouse.
You must provide the courts with the entirety of your financial situation relating to your business. By hiring an experienced attorney, you can rest assured that all documentation is properly filed and submitted timely.
How can I protect my business from a divorce?
There are three ways to potentially protect your business from a divorce. Drafting a prenuptial agreement with your spouse prior to your marriage is a preferred method to protect your business. However, if you are already married, you may want to look into drafting a postnuptial agreement that will serve a similar purpose. Finally, you may consider drafting a shareholder agreement if you and your spouse jointly own a business. A shareholder agreement will recount the value of each party’s interest in the company and limit the transfer of ownership to another party. If you follow this third option, make sure that a family law attorney reviews the agreement prior to signing. There are very particular requirements that must be met to be binding on the divorce court, and most corporate shareholder agreements do not meet these requirements. For any further questions, give us a call today.
Contact Our The Woodlands, Texas Firm
If you are looking for an expert Montgomery County divorce lawyer, Bolton Law is the right law firm for you. Bolton Law’s legal team handles all family law matters, including divorce, child custody, child support, spousal maintenance, and much more. Contact Bolton Law today to schedule your initial consultation.