Perhaps you launched your own Texas business during your marriage. Whether it’s been up and running for decades or just recently came out of the startup phase, you no doubt are proud of your accomplishments, as you should be. Maintaining a profitable business can be a challenging yet rewarding experience. Managing finances can become complex, especially if your business is earning big profits. So, what happens in a divorce? How can you protect what you’ve worked so hard to acquire?
A high-net worth divorce can be stressful, especially if your relationship with your spouse is less than amicable. There are several things to keep in mind regarding a business valuation and things you can do to make sure you receive a fair settlement. Most importantly, there are things you can do to protect your business as you work toward a fair agreement in a Texas court.
Did you keep personal and business finances separate?
You hopefully have kept your personal finances separate from all financial transactions related to your business. All marital assets are subject to division in a divorce. Texas happens to be one of nine jurisdictions that operate under community property guidelines, which means your marital property will be split 50/50 with your ex.
If you comingled your business finances with personal funds during marriage, it might also be subject to a 50/50 split in your divorce. However, if you kept your business funds separate or signed a prenuptial or post nuptial agreement regarding what would happen to your business or how its assets would be divided in a divorce, then there may be grounds for separate ownership for certain issues.
Is your spouse inflating his or her contribution to the business?
Even if you didn’t sign a prenuptial or post nuptial agreement regarding your business, if your spouse has never had anything to do with the company, this is something you’ll want to bring to the court’s attention. If he or she did have regular duties or support your business in some way, it’s critical that you provide as much accurate detail about his or her participation as possible.
In some cases, a spouse might try to exaggerate his or her role in a business, in the hope of receiving a bigger payout during property division proceedings in divorce. It’s important to know where to seek support and what you can do to rectify such issues to protect your business interests and ensure a fair settlement. If you plan to buy out your spouse’s shares in a business you both ran together during marriage, it’s a good idea to seek financial and legal guidance ahead of time.