When a divorce is on the horizon for you it is reasonable to want to learn as much as you can. The fact of the matter is that not only is a divorce a difficult process to go through but many of the concepts and lessons of a divorce can be just as difficult to learn about.
For such a life changing and important institution, there isn’t a whole lot of information about some aspects of divorce available for people.
If you are a business owner you may be nodding your head up and down at this point. Having worked for a long time towards building and growing your own business you now have grown worried that a divorce could spell disaster for that business and for yourself.
Be Careful who You Take Advice From
It’s possible that the only information that you’ve been able to uncover on this subject is from the unsolicited advice of a friend who has gone through a divorce.
While relying on the advice of a trusted friend is not a bad thing in many circumstances I would caution you to lean too heavily on the words of a person that is not an attorney and has only been a part of one divorce process- their own.
The fact remains that your business is subject to being divided up as part of the community estate that you and your spouse share ownership in. While the actual business itself may not be subject to division, the ownership percentages in the business may be depending on whether the business is characterized as your separate property or the aforementioned community property of both you and your spouse.
If your divorce comes down to a trial, then it is possible that the judge could decide the business is community property thereby making it susceptible to an equitable division based on all of the circumstances of your divorce case.
For all of the business owners like you out there, this blog post is aimed at informing you about what issues are most important in a divorce from the standpoint of your business.
Characterizing Marital Property
Your business will ultimately be characterized as community property or your separate property. Upon the conclusion of your divorce, if you are not able to settle your case, a judge will intercede and make the determination for you and your as to whether or not your business is to be considered community property.
It is up to you to produced evidence to show the court that your business is your separate property. The reason being is that there is a presumption that all property in existence at the time of your divorce is community property.
Asset Division Community versus Separate
How your community estate is divided can be impacted by how your business is characterized.
In the event that you are able to prove to a judge that your business was in existence prior to the marriage and should therefore be characterized as your separate property, this determination may be used against you when dividing up property that is considered to be community property.
Just and Right Division Does Not Mean Equal
As we just stated, the community estate in your divorce will be divided in a fair and equitable manner by the judge. However, fair and equitable should not be confused with equal.
A judge does not have to cut the community estate down the middle in equal shares. Typically, a judge will take into consideration the size of each spouse’s separate estates and then use that in their determination as to how the community estate should be divided.
For instance, suppose that you are older than your spouse and had an opportunity to build a business and own property before marrying your spouse. Your separate estate would therefore be considerably larger than that of your spouse through no fault of either of you.
However, because of the value of your separate estate (real estate plus your business) a judge could decide to award your spouse a disproportionate share of the community estate in order to compensate for his or her comparatively small separate estate. This may seem unfair, it very well may be, but it is often times the reasoning that a judge will utilize in dividing up property in a Texas Divorce.
Valuing your business- how it’s done is critical. It is important to use a qualified and experienced appraiser of businesses to help you and your spouse determine the business’ value. The appraiser will use documents like tax forms and financial statements (profit/loss statements, etc.) to help determine its value.
Deciding on an appraiser can be difficult since these folks don’t grow on every tree plus the fact that you and your spouse will likely have to agree on which appraiser to utilize.
That doesn’t even take into consideration that the appraiser will need to be paid for his or her services and your case will have to wait on the appraiser’s determination as to the value of your business in order to proceed.
Obviously you will want to select an appraiser who has years of experience helping people in your position determine the value of a business. There are specific titles that business appraisers hold as opposed to, say, real estate appraisers.
Review the credentials and experience of an appraiser before hiring one. If you cannot locate an appraiser that you trust, it may be time to ask the advice of people in your field of work and to have your attorney utilize his or her network to help in the search as well.
Questions about your divorce’s affect on your business? Contact the Law Office of Bryan Fagan, PLLC
In order to learn more about how business owners are affected by divorce, please do not hesitate to contact the Law Office of Bryan Fagan, PLLC today. A licensed family lawattorney is available six days a week to meet with you free of charge. Our office represents clients across southeast Texas and would be honored to do the same for you and your family.
If you want to know more about what you can do, CLICK the button below to get your FREE E-book: “16 Steps to Help You Plan & Prepare for Your Texas Divorce”
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Law Office of Bryan Fagan, PLLC | Business Owner Divorce Lawyer
The Law Office of Bryan Fagan, PLLC routinely handles matters that affect children and families. If you have questions regarding Business Owner Divorce Lawyer, it's important to speak with a Business Owner Divorce right away to protect your rights.
A Business Owner Divorce Lawyer is skilled at listening to your goals during this trying process and developing a strategy to meet those goals. Contact Law Office of Bryan Fagan, PLLC by calling (281) 810-9760 or submit your contact information in our online form. The Law Office of Bryan Fagan, PLLC handles Divorce cases in Spring, Texas, Cypress, Spring, Klein, Humble, Kingwood, Tomball, The Woodlands, Houston, the FM 1960 area, or surrounding areas, including Harris County, Montgomery County, Liberty County, Chambers County, Galveston County, Brazoria County, Fort Bend County and Waller County.