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Dividing Your Business During Divorce

 Posted on January 16, 2018 in Family Businesses

Texas divorce lawyerAlthough most people associate divorce with child custody issues, alimony, or deciding who will keep the marital home, many couples who jointly own a family business must also divide the company itself. This requires an in-depth valuation of the business, as well as a determination of whether the company is actually jointly owned. Furthermore, once a couple’s business interests have been appraised and the parties have agreed to a settlement, the business’s actual division will need to take place, which can be difficult, especially for couples with an acrimonious relationship. For help determining the value of your own business and coming to a settlement agreement with your spouse, please contact one of our experienced high asset divorce attorneys today.

Initial Considerations

Before deciding on how to divide a business during divorce proceedings, the couple in question must consider a variety of factors, including:

  • Whether one spouse owned the business prior to marriage and if so, for how long;
  • How the value of the business changed during the marriage;
  • Whether one spouse is more qualified to run the business;
  • The company’s worth;
  • How a departing spouse can avoid liability for business debts after divorce; and
  • The tax ramifications of dividing the business.

All of these considerations will help determine whether a business is community property or separate property, which in turn dictates whether the company should be divided. In the event that the business is deemed to be community property, it will need to be split equitably between the parties. In many cases, this takes the form of one spouse “buying out” the other’s share of the company in a single lump sum payment or a series of payments that are submitted according to a predetermined schedule. Alternatively, both parties could maintain active roles in the company, each continuing to fulfill his or her specific responsibilities. However, if division is not an option, some couples may be forced to dissolve their business entirely and split the proceeds.

Dividing the Business

Before a divorce settlement can be finalized between joint business owners, the couple will need to ensure that the division of the company’s assets, ownership rights, and duties are all documented properly. This step is necessary, as the documentation must be included in the settlement agreement, the final divorce decree, and in the business entity’s paperwork. Failing to ensure that this information is recorded will jeopardize the completion of the company’s division and could lead to conflict between the parties.

Contact a High Asset Divorce Attorney About Your Case

To speak with an experienced Georgetown high asset divorce attorney about valuing and dividing your own business, please contact Powers Kerr & Rashidi, PLLC at our office today. We are eager to begin working on your case immediately.



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