Property division during divorce does not have to destroy a business
When one spouse owns a business in Texas, dividing marital property during a divorce could lead to failure without the assistance of an attorney.
During a divorce in Texas, setting emotional matters aside to deal with the legal issues may be difficult. However, being able to reach a settlement could make all the difference in how well the spouses are able to carry on with their lives. When both spouses have steady income, the focus may be on issues such as the home, retirement accounts or child custody. If one spouse owns a company that contributes to the family’s livelihood, coming to an agreement that is fair without destroying the business may be difficult.
With the right legal assistance, a couple may be able to agree on property division without costly litigation that leads to business failure.
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Business ownership and marital property
The property division will be based on what the judge believes to be fair and just, and a number of factors are considered before the award is made, according to Texas statutes. It is a community property state, which means that everything acquired during the marriage automatically belongs to both spouses. Even if the business was formed before the marriage, it could still be marital property if both spouses contributed to it during the marriage.
Every divorce is unique, but a family law attorney skilled in mediation should be able to apply the statutes to the specific situation. After their relevance to the case is explained and the couple understands what elements the judge will take into account, they can better determine for themselves what may be considered reasonable.
Assets and income
According to Entrepreneur.com, the worth of the company to the spouse is not the consideration, but the amount for which it would sell on the open market. This amount may be used as a negotiation tool, or it could be that the owner would be able to buy out the other spouse. The value of the business as a source of income may also be part of the discussion, particularly if the company is a private practice that is dependent on the owner’s expertise.
The role of a mediator can be essential in helping both parties to approach the division in a way that preserves the source of income to the advantage of both.
Mediation vs. litigation
Perhaps one of the best ways to prevent the loss of the company is to seek an attorney skilled in mediation. Those who are able to avoid litigation are able to get through the legal process with less expense, and when spouses can agree, they do not have to settle for what the judge decides is fair.
At Scott M. Brown & Associates, experienced attorneys are available to provide assistance with divorces that involve business ownership and other complex property division issues.