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 complex process to go through, but many of the concepts and lessons of a divorce can be just as challenging to learn about.
For such a life-changing and important institution, there isn't much 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 towards building and growing your own business for a long time, you now have grown worried that a divorce could spell disaster for that business and yourself.
Be Careful Who You Take Advice From
The only information you've been able to uncover on this subject may be 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 depend on whether the business is characterized as your separate property or the community mentioned above property of both you and your spouse.
Suppose your divorce comes down to a trial. In that case, 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 business owners like you out there, this blog post aims to inform 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 cannot settle your case, a judge will intercede and determine for you, and you are as to whether or not your business is to be considered community property.
It is up to you to produce 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.
Suppose you can prove to a judge that your business was in existence before the marriage and should therefore be characterized as your separate property. In that case, this determination may be used against you when dividing up property that is considered to be community property.
And Right Division Does Not Mean Equal
As we just stated, the community estate in your divorce will be divided fairly and equitably 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 consider 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. Therefore, your separate estate would be considerably more significant 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 to compensate for their comparatively small separate estate. This may seem unfair, it very well maybe, but it is often 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 essential to use a qualified and experienced appraiser of companies 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 tricky 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 consider that the appraiser will need to be paid for their services. Your case will have to wait on the appraiser's determination as to the value of your business to proceed.
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 have your attorney utilize their network to help in the search.
Questions about your divorce's effect on your business? Contact the Law Office of Bryan Fagan, PLLC
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 law attorney 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 essential 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 the 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.