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Protecting Your Business During a Divorce

Updated: Sep 28, 2023 @ 10:16 am

Less than 1 minute Reading Time: Minutes

When life meets divorce proceedings, your assets, notably your business, can come under intense scrutiny.

Understanding Community Property in Texas

If you’re a business owner going through a divorce, understanding community property and Texas law is important. In Texas, most assets, including businesses acquired or grown during the marriage, are community property. If it’s shared between partners, then it’s up for grabs during a divorce. With skilled legal representation, you can possibly avoid surrendering your business.

Was Your Business Born Before the Vows?

If you started your business before your marriage, then you’re in a favorable position. Your business, in this case, starts its journey as your separate property. However, any increase in its value during your marital journey may land in the communal bucket.

However, if you can clearly delineate personal versus business expenses and keep immaculate financial records, you should be in a better position to defend yourself.

Business Valuation

Knowing the value of your business is more than just numbers; it’s about preparing a fort. Employing the services of a professional appraiser and arming yourself with an accurate business valuation preps you for negotiations. This step isn’t about mere dollar amounts—it’s about capturing the essence, history, and potential of your business.

Pre & Postnuptial Agreements: A Safe Harbor

Pre and postnuptial agreements aren’t whispers of distrust; they’re shouts of clarity. These legally binding documents can ensure your business remains your separate property. And should the winds of fortune blow favorably, increasing your enterprise’s worth, this growth, too, can stay protected. Protecting yourself requires vision, foresight, and, of course, sound legal counsel.

Tactical Financial Fortifications

Erecting walls around your business assets is an essential form of preservation. Consider setting up trusts or different asset protection strategies. This way, you can guard your assets and ensure smoother inheritance transitions. Such maneuvers should be executed with experienced counsel who knows the ins and outs of Texas Family Code. With sound legal counsel, unintended blowback can eliminated or minimized.

Your Earnings: Tread with Caution

The way you draw your salary, reinvest, or even how you handle business finances during a divorce casts ripples.

For example, if you have a sudden upswing in your salary, it could mean an increase in your spousal maintenance requirements. Pulling back too hard? It might raise eyebrows. The watchwords? Consistency, clarity, and a tad bit of strategy.

Engaging Experts: Put The Wind in Your Sails

Call Tad Nelson & Associates For Help

From forensic accountants who unearth hidden assets or irregularities to business appraisers offering invaluable insights, marshaling experts to your corner is a necessity.

At Tad Nelson & Associates, we know what it takes to help business owners minimize their loss exposure in divorce court. If you need help or experienced guidance, call us.

We’re based in the heart of Galveston, with additional law offices in League City. Whether it’s divorce proceedings, estate planning, child custody battles, or more, our phone lines, 409-904-0043, are always open.


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