Splitting Up a Shared Business in a Texas Divorce

 Posted on December 30, 2024 in Complex Property Litigation

Whether you started a business with your spouse or had an existing business before you married, you may have to make a tough decision about what will become of the company if you get divorced. Finding a solution that works for you and your spouse may help you avoid trouble later down the line, so as not to interfere with your business’s daily operation.

A Travis County, TX divorce lawyer can provide invaluable assistance throughout your divorce, seeing that your business is properly valued. At Powers Kerr & Rashidi, PLLC, our attorneys will make sure that your best interests are protected in negotiations with your spouse, and if necessary, our talented litigators can advocate for your rights to your business in court.

Maintaining Joint Ownership

If you and your spouse part on amicable terms, you may find that it is best to continue working as business partners after a divorce. The main benefit of this option is the lack of disruption to the daily operations of the business. Some spouses may be able to easily compartmentalize their work lives and their personal lives, but of course, this is not always a reasonable possibility. If you can set aside your differences with your spouse in a low-stress setting like mediation, you might agree to continue running the business as before, with some new boundaries in place.

Buying Out Your Spouse’s Interest

In some cases, you may decide that it is best to continue running the business on your own. If the court finds that your spouse contributed to the growth of your business with marital funds, he or she may have a legitimate claim to your business. The simplest way to cut off this loose end is to compensate your spouse for his or her interest in the company. This is a practical solution to keeping your business up and running, though you and your spouse may disagree about what constitutes fair compensation in a buyout.

To get an accurate appraisal of how much you owe to your spouse, you may have to get in contact with an accountant or other financial experts. At Powers Kerr & Rashidi, PLLC, our attorneys regularly consult with valuation professionals who can help you negotiate from a strong, informed position.

Selling the Business

If there is no path forward for a marital business, you may find that it is best to sell the business and divide up the profits between you and your spouse. Like any other community property in a Texas divorce, the proceeds from the business are divided according to what is "just and right" at a judge’s discretion, which may not always entail a 50/50 split.

Get in Contact With an Austin, TX Family Law Attorney Today

Your business may very well be one of the most valuable assets in your divorce. As such, you should make sure that your interests in the company are protected. The Travis County, TX family law attorneys at Powers Kerr & Rashidi, PLLC are here to advocate on your behalf, helping you reach a favorable resolution. For any inquiries about the legal services we offer, call our offices at 512-610-6199 today.