Your Texas business may be impacted by the fact that your marriage is going to be coming to an end. However, there are many steps that you can take to ensure that your company survives the divorce process. In some cases, it may even be possible to work directly with your former partner after divorce proceedings officially come to an end.
How to protect the company from being acquired by your spouse
It may be a good idea to place the company into a trust to protect it from being awarded to your spouse in a final divorce settlement. Generally speaking, the trust will be considered valid as long as it’s created long before the divorce process begins. Alternatively, you could enter into a buy/sell agreement with your other partners to prevent your spouse from being able to purchase an equity stake in the company.
Your spouse may accept a buyout
It’s possible that your current spouse may accept a buyout in lieu of being offered an equity stake in your business. A buyout would allow them to obtain their fair share of the company’s value without forcing it to close. If necessary, the buyout can be funded by insurance payments or installment payments.
Should you work with your spouse?
If you have an amicable personal relationship with your spouse, it may be possible to work with them after the divorce is finalized. In some cases, this may be preferable to customers, shareholders, and others who want to see stability within your management team.
Ideally, you’ll be proactive in safeguarding your company against the negative impacts of a divorce. This may help to ensure that you don’t have to cede control of your business, sell it or close it as part of a settlement or formal court order.