If you’re a business owner going through a divorce, many complicated legal steps come into the picture. You have to protect what you’ve built over the years and act before it is too late. That’s why divorce attorneys experienced in handling such complex cases want you to know some key things so that you are mentally and legally prepared. When asset division takes place during a divorce, especially for business owners, a lot is at stake. Having the right information and partnering with a good divorce attorney for business owner makes all the difference in your case. In this blog, we will walk you through essential things you need to know. So, keep reading.
Is a Business Considered Marital Property?
When the divorce process is initiated in Texas, the business is presumed to be marital property, also known as community property. If the couple founded or acquired a business during their marriage, it is definitely a shared asset and subject to division during the divorce.
However, there are several circumstances under which the business will be considered separate property. To have a certain business considered separate property and protect it from division, you must present clear documentation. A divorce lawyer Dallas can guide you regarding what documents are needed.
The three ways in which you can prove that the business is separate property include:
- You founded the business before getting married.
- You received the business as a gift or inheritance.
- You created the business during your marriage, but by using funds or assets that are considered separate property.
Handling Ownership of a Shared Business by the Spouses: Exploring the Options
Once a divorce attorney for business owners helps complete the business valuation, the spouses can decide on the best ownership arrangement as part of dividing marital assets. There are three different options available in this case, as mentioned below:
- Sole Ownership:
If one of the spouses was proactively involved in managing a business, they might continue owning the business. The couple may mutually agree that one spouse will solely own the business while the other spouse will receive other community property of the same value.
Another possible arrangement for sole ownership is that one spouse may buy out the complete share of the other spouse and make either a lump-sum cash payment or agree to an ongoing payment plan.
- Joint Ownership:
If both spouses used to own and operate the business, they can agree to continue serving the same roles in the company, irrespective of the decision of separation in their personal life; they may also opt for joint ownership.
In case of joint ownership, a divorce attorney for business owner will help establish a legal partnership agreement that outlines the legal partnership of each partner and clearly defines their roles and responsibilities.
- Sale of Business Assets:
In some situations, the most peaceful resolution in terms of division is to sell the business to a new owner after valuation. This way, there are no further conflicts about the ownership of the business, its assets, and the profits arising from it.
They will then divide the earned amount between both partners in an equitable manner. This arrangement also gives them the financial resources they may need to pay off any outstanding shared debts.
Prenuptial Agreements and Businesses: Can They Protect Your Hard Work?
You’ve built your business diligently for years – but a divorce might divide it in a way that you don’t like. To protect your business and ensure the court does not consider it marital property, draft a clear and precise prenuptial agreement before entering the marriage.
The Role of a Divorce Lawyer Dallas in Ensuring a Fair Division of Business
There are many benefits of hiring a divorce attorney for business owner, such as:
- They have specialized expertise in business law.
- They help you navigate business ownership disputes and buyout agreements.
- They offer support regarding accurate business valuation.
- They protect you against unnecessary asset division.
Want Strong Legal Help? Clark Law Group Can Offer It!
At Clark Law Group, they combine legal strength with deep business understanding to protect the legacy you’ve built over the years. You can trust their divorce attorneys to fight for a fair and strategic outcome.
Summing Up
Divorce is emotionally overwhelming, but navigating property or business division can be very stressful. That’s where a skilled divorce attorney for business owner can prove to be helpful. With the right legal guidance and support, you can protect what’s truly yours. If you are seeking help with your divorce, you should reach out to Clark Law Group today!
