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TX divorce lawyerWhile there are a number of benefits to going into business with other partners, there are also a few drawbacks. For instance, if one partner’s marriage ends, the interests of any other business partners could also be at risk. This is because Texas law requires all divorcing couples to divide their marital property, which includes business assets, equitably. When this happens, the business partner’s ex-spouse could become a shareholder in the business as well, which means that he or she could have a say in how the company operates. Fortunately, there are ways to prevent this type of division, so if you have ownership in a business and are dissolving your marriage, or one of your business partners has filed for divorce, please contact our high asset divorce legal team to learn more about your options.

How to Protect Your Business Interests During Divorce

A business partner’s divorce can have important implications for the ownership interests of other partners and shareholders, so it is important for those who own an interest in a business to take certain steps to prevent disruption. For instance, including a contingency for divorce in a business’ ownership, partnership, or shareholder agreement is one of the best ways to protect a business in the event of divorce. These provisions can require a partner’s ex-spouse to sell a business interest that he or she was awarded in any property division settlements following divorce, back to the company itself. It’s important to note that when drafting this type of provision, the parties should ensure that it contains specific terms and conditions for valuing and purchasing the shares. Failing to take these precautions can have serious repercussions down the road, leading to complicated and expensive litigation, which can put a company at risk.

It’s also a good idea to have the spouses of all partners agree to the divorce contingency in writing before any marital discord actually arises, which can help bolster the enforceability of the contract in the event of divorce. Finally, many business partners are strongly encouraged to enter into a prenuptial agreement before getting married, in which, they can specify that business interests remain separate property, even in the event of divorce. Separate property, unlike marital property, remains in the sole possession of the original owner, unless it becomes commingled with marital assets to a significant degree.

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b2ap3_thumbnail_QDRO.jpgMany high asset divorces require the division of substantial retirement funds, which in Texas, usually involves the issuance of a Qualified Domestic Relations Order (QDRO). These orders, which are issued by a judge, essentially separate and transfer retirement plans between two parties. In fact, the issuance of a QDRO is often necessary before an employer’s pension plan administrator will even agree to divide a retirement account. QDROs contain valuable information, including how the account will be utilized going forward and how its contents will be divided. If you have retirement benefits that were at least partially accumulated during your marriage, you may need to divide those funds with your ex-spouse upon divorce. To learn more about this process, please contact an experienced high asset divorce attorney who can address your questions and concerns.

Dividing Retirement Funds

A party’s retirement funds are not always divisible upon divorce, as courts will usually only order equitable division if funds were accumulated during the marriage itself. Although it depends on the type of account, this means that the retirement funds will either pay out on a regular basis in the future or will be available for withdrawal at the parties’ discretion. It’s also important to note that the only funds that will be subject to division are those that accumulated during the marriage. Funds that accrued prior to the marriage will remain the sole property of the named participant.

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complex divorce, complex divorce negotiations, financial assets, Round Rock complex divorce attorney, asset value, high financial assets, complex property litigation, divorce settlement, complex divorce settlementsWhen a couple is involved in a complex divorce, there are usually a number of financial assets that need to be divided up between the two. However, financial advisors recommend that people who are involved in high asset divorces really examine the actual worth of the asset they are fighting for or willing to concede to the other party during negotiations.

The value of an asset may change when it comes to liquidating that asset, depending on tax liabilities and/or depreciation values. For example, if a couple owns a home that has $1 million in equity and they also have a 401(k) account that is worth $1 million, the actual long-term value of those two assets is different.

The spouse who gets the house will have what the IRS refers to as a "gain exclusion," meaning that if the spouse sells the house, a portion of the profit will be exempt from capital gains tax. But there is no exclusion for the spouse who gets the 401(k) account. If the spouse liquefies the account, he or she could owe up to one third of it in taxes.

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Austin divorce attorney, Cedar Park complex divorce attorney, commit financial infidelity, complex divorce, complex divorce settlements, financial infidelity, high asset divorce, Round Rock family law attorneyAccording to National Endowment for Financial Education, one-third of people admit to financial infidelity in their marriage. Income, bank accounts, purchases, cash, and other financial information are just some of the items that may be hidden from a spouse. Not only can this have consequences on a marriage, it can also have a direct bearing on any complex divorce settlements should the couple's marriage end.

There are several ways people can hide income and assets from a spouse in order to avoid including them in the marriage estate. A spouse who is going through a high asset divorce and suspects the other spouse has committed financial infidelity should consider the following:

  • A spouses who are trying to hide money will transfer funds into a separate account that has just his or her name on it;

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Cedar Park, complex divorce, complex divorce attorney, complex divorce settlements, divorce financial planners, financial planners, Georgetown family law attorney, high asset divorce, Leander family law lawyer, Round Rock family law attorney, The Law Offices of William D. Powers, Williamson County, Williamson County family law attorneyAn increasing number of couples are trying to negotiate complex divorce settlements and are turning to divorce financial planners. Many attorneys representing wealthy clients in these high asset divorce negotiations are recommending the clients consult with financial planners before finalizing their divorce settlements.

Quite a few financial planners are adding divorce planning to their list of specialties. According to a survey conducted by the Financial Planning Association, 25 percent of planners have already done so and another 20 percent said they plan on offering the service to clients.

Currently, there are approximately 1,700 certified divorce planners. This represents a 40 percent increase since 2011.

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The Law Offices of William D. Powers

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