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Business ownership can cause divorce issues

Friday, September 22, 2017

When thinking about divorce, it is common to immediately think of asset division as one of the major potential stumbling blocks to an amicable settlement. But as Texas residents are doubtlessly aware, the added assets accrued by a business can exacerbate divorce issues related to splitting property. Despite how controversial a business-related divorce can be, there are ways to help ensure the process remains relatively smooth. 

Unsurprisingly, the best way to protect business assets is through a pre- or post-nuptial agreement with a spouse. An agreement signed before or after the marriage license is signed (but before a divorce is processed) can help put down in clear terms who is entitled to what in terms of business assets. However, this is not always possible. 

In cases where the split is likely to be less than amicable, an appraisal of the business conducted by an impartial third party to determine its true value can be very helpful. This can help divorce mediators and attorneys determine, based on state law, what the best way to divide business assets might be. The same is true of scenarios in which both spouses are partners in the same business: a signed agreement can go a long way. 

Divorce issues are not always cut-and-dry, as some Texas residents can strongly attest. However, being prepared in advance with the knowledge and paperwork required to process a divorce quickly and efficiently is a good move for both parties. Preparedness can be a key step in getting on with the single lives of both individuals. 

Source: businessinsider.com, "Here's how to protect a business from divorce", Jacqueline Newman, June 8, 2015

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