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Family business can complicate divorce

If a business is created during a marriage in Texas, it is considered community property. This is true even if just one of the spouses erected the business and has his or her name on the title. Like all other community property, a business created during the marriage must be divided during divorce.

For a closely held business that is deemed community property, achieving a settlement is usually based on both parties' goals concerning their post-divorce lives. Perhaps both spouses are actually ready to retire and thus are okay with selling the business. In some cases, the spouses may have been business partners, and one of them plans to keep running the business without the other's help. Still, in other cases, one spouse may have focused on the business while the other heavily supported it.

Depending on a couple's particular case, a few options exist when dealing with a family business. One is to simply sell the business if both parties are equal partners in the company -- a move that requires first getting a business valuation to make sure that the sale amount is appropriate. Another option is for one spouse to buy out the other. With a buyout plan, the spouse purchasing the business can pay a lump sum of cash or make payments over time for the business. You can even offer other marital assets instead of cash to execute the buyout.

A third option is for both parties to continue operating the business. This is viable if they can get along as business associates or partners. An attorney in Texas can help you to determine the best route to take when dealing with a family business during a divorce proceeding.

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Jamie Graham & Associates, PLLC
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