Without a proper prenuptial agreement, you may be looking at the dissolution
of your hard-earned business. Every divorcing couple is entitled to split
all marital assets during the divorce process, which includes the business
itself. Even if one partner started the business before the marriage,
if the spouse contributed to the success of the business, it would still
be considered during property division.
Splitting a company could go any of several ways, depending on how you
and your spouse negotiate. You could wind up being in a business partnership
with your spouse, which may be more difficult if your divorce has created
bitter feelings between you. If you want to keep the business entirely,
you might be able to do so; however, you would have to give up something
of equal value. For example, if you decide to give your half of the claim
to the marital home, your spouse may agree to give up his or her half
of the business.
More often than not, one-half of the couple will buy out the other half.
Both will get the business valuated to determine its full value. The one
who wants to own the business entirely will pay his or her spouse the
value of the spouse’s share. However, this can only work if the
buying spouse has enough cash to buy out the selling spouse. Some wives
and husbands will allow payment over time, rather than a lump sum, but
you would have to discuss this with your spouse or his or her attorney.
In the worst-case scenario, you and your spouse may have to sell the business
itself and divide the proceeds as a way to compromise on the business.
Liquidation of the company is rarer because courts are reluctant to agree
to this. However, this could be the only solution that works, according
to the mediator or judge.
The best way to protect your business during a divorce is to hire an excellent
Houston business litigation attorney.
Pete Patterson of
Patterson, P.C. is a Board Certified attorney in personal trial law and civil trial law.
He can take a look at your case and give you excellent legal advice regarding
your situation prior to the divorce.
Talk to us in a case consultation today! Call us at (713) 489-1215 or
fill out our online form to tell us about the specific details of your case.