Maybe you are the third-generation owner of a family plumbing business. Perhaps you opened your own accounting firm and have developed a professional practice that supports your family. When you own a business, that ownership may be a cornerstone of your financial security and your plans for the future.
If you find yourself thinking about divorce, you might also start worrying about what will happen to your business. Could you wind up sharing it with your ex? There are steps that you can take or may have already taken that can protect your business from claims by your spouse during a divorce.
Establish and maintain your business as separate property
If you already had the business when you got married or if you inherited either the company or the money you used to start the business, you may have a relatively straightforward claim to establishing the business as separate property. Separate property remains under the control of one spouse and usually isn’t subject to division in a divorce.
If you started the business during your marriage or used marital assets to maintain the business, the courts are more likely to view it as marital property that might be subject to division. However, it is possible for you to execute a contract with your spouse, such as a prenuptial or postnuptial agreement, that designates a business you start as separate property despite the use of marital funds.
Take steps to keep the business out of court
If you think that the Texas family courts are likely to view your business as marital property and you don’t want to divide it or share its value with your spouse, reaching an agreement with them outside of court may be the most straightforward way to protect the business.
In some cases, your attorney may be able to negotiate terms directly with their lawyer, allowing you to find some kind of compensation that you both feel is acceptable in order for them to sign off on you retaining sole ownership of the business.
Other times, alternative dispute resolution options, arbitration or mediation could help you take more control over the process of dividing your property and help you push for the terms that matter the most to you, such as the retention of your business. Planning is often key during a divorce where you have a specific goal, like the retention of a particular asset.