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Texas divorce lawyerOwning a business with a spouse is a relatively common practice, and while many of these types of businesses are successful and lucrative, they can also raise a host of complicated issues in the event of a divorce. This is because couples who own companies together must grapple with dividing the business if they later decide to dissolve their marriage, which can be difficult if both parties wish to retain an active role in management or there is disagreement regarding the value of the company itself. For help addressing the fate of your own company after divorce, please contact a member of our high asset divorce legal team for advice.

The Importance of Business Appraisals

The first step in these types of cases is to determine the value of the business in question, as this will affect how and whether the company should be divided between the spouses. Like any other asset, there are professionals who specialize in appraising businesses. These individuals assist divorcing couples who own a business together by determining the fair market value of the company, which refers to the amount that a buyer would be willing to pay for a business from a seller who wants to sell but is under no necessity to do so.

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Texas family lawyerMost people don’t enter into marriage with the expectation that they will later get divorced. Similarly, couples who start businesses together usually do not anticipate running into any obstacles regarding ownership and control. The reality, however, is that many couples who are also business owners will face complicated issues in the event of a divorce, so if you and your spouse are contemplating divorce and you both share an interest in a family business, we strongly encourage you to speak with an experienced high asset divorce attorney who can explain your legal options.

Retaining Co-ownership

Once a couple who owns a family business decides to get a divorce, they must start addressing the future of the company. For some couples, retaining co-ownership is a good option, especially for those who are deeply committed to their enterprise. However, it can be difficult to maintain a close working relationship with an ex-spouse, although many business owners are able to do so through careful scheduling and focusing only on the business aspects of their relationship.

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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:

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Texas high asset attorney, Texas complex litigation attorney, Texas complex divorce lawyer, In many situations, a closely-held business is the largest economic asset in a marriage. Moreover, it is often the couple's primary source of income; in fact, in many cases, spouses have put off development in their professional careers to pour their time into the businesses, and reintegrating into the labor force may not be easy. These economic factors sometimes make it difficult to divide these assets in a high asset divorce.

There is an emotional aspect as well, because it is often difficult to disconnect from a business after it has been such a large part of life.

Fortunately, in a number of cases, it is possible to keep a business intact after a high asset divorce. Truth be told, many spouses are better business partners than romantic partners. If they continue to work together, there will inevitably be tension and awkward moments, but these things exist in almost any partnership.

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Texas high asset divorce attorney, Texas complex litigation attorney, Texas divorce laws, Although there is nearly always some overlap, most assets in a high net worth divorce fall into one of two general categories. Some property items, primarily things like securities brokerage accounts and retirement nest eggs, are prized mostly for their economic value. Others, such as a primary residence or vacation property, have a greater emotional value.

A family business is one of the rarer items that is very much a mixture of both these elements. In many cases, a business is a couple's primary source of income, or even the only such resource, so it has tremendous economic value for both the husband and wife. At the same time, especially if it was founded during the marriage, both parties have a great deal of "sweat equity" in the endeavor.

What Happens to the Business?

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The Law Offices of William D. Powers

8911 N. Capital of Texas Highway, Building 2, Suite 2105, Austin, TX 78759