Protecting Your Business During Divorce
Going through a divorce is a traumatic experience on a personal level. It becomes doubly challenging when a business enterprise is involved, especially in the state of Texas where the laws make it more difficult to keep your business insulated from your personal life.
If you are experiencing a divorce or need support with family law issues, don’t hesitate to contact our family law attorneys at Bastine Law Group at 281-784-3222.
Strategy 1: Pre-Marital and Post-Marital Agreements as Safe Guards
A pre-marital or post-marital agreement, commonly known as prenuptial or postnuptial agreement, can be one of your strongest defenses. In this contract, you can clearly define that your business remains a separate property and should not be treated as communal asset during divorce proceedings.
Strategy 2: Keep Business and Personal Finances Distinct
Though it may sound elementary, keeping your business and personal finances separate can often become blurred for entrepreneurs. Ensuring this divide not only helps in better business management but also safeguards your venture from being intercepted as community property in case of a divorce.
Strategy 3: Compensate Your Spouse Fairly for Their Business Participation
If your spouse has contributed to your business in any capacity, like financial investment or offering labor, it's essential to recognize and compensate their contribution fairly. This will not only uphold their right to fair compensation but can also prevent further complicacy in dividing assets.
Strategy 4: Leverage Asset Protection Trust for Business Assets
Creating an asset protection trust for your business assets can be an effective way to keep them intact during the court proceedings. Basically, by transferring the business assets to this trust, they are essentially removed from your personal properties that can be the subject of division.
Strategy 5: Accurate Business Valuation by Financial Experts Pays Dividends
Business valuation plays a crucial role during asset distribution in divorces. Therefore, it's important to get a fair and accurate evaluation done by financial experts. This detailed valuation can prevent any exaggerated claim on the business or its profits from the opposing side.
Strategy 6: The Importance of a Knowledgeable Divorce Attorney
When your business is at stake during a divorce, you'd want the best protection possible. A hardworking divorce attorney, who has experience in dealing with business assets, can be a great asset. Their intimate knowledge of the Texas community property laws can help protect your interests better.
Being Proactive and Prepared in Divorce Proceedings is Helpful
If there's one thing more complex than divorce proceedings, it's the divorce proceedings where businesses are also involved. Texas's community property laws only add another layer of complexity. Therefore, it's important to arm yourself with the right legal advice and have all necessary protective measures in place.
Implementing These Strategies Helps, but They Need to Be Balanced
Adopting some or all of these strategies does not guarantee absolute protection for your business. However, correctly and wisely implementing these strategies can build a comprehensive shield around your business dimensions, protecting them to a large extent.
Frequently Asked Questions
1. Can my business be treated as community property during a divorce in Texas?
Yes, usually all assets acquired during a marriage, which includes businesses too, are deemed as community property in Texas.
2. How does a post-marital agreement protect my business?
It contains provisions related to the treatment of business assets during a divorce. With this agreement in place, your business remains insulated from being treated as community property.
3. What all actions can I undertake to safeguard my business in Texas during a divorce?
Besides creating prenuptial or postnuptial agreements, you can keep personal and business finances separate, adequately compensate your spouse for their contribution in the business, create an asset protection trust for your business assets, have an accurate valuation done by financial experts and seek counsel from experienced divorce attorneys.
4. How does getting a knowledgeable attorney help protect my business during divorce?
An accomplished divorce attorney with the right skill set in handling community property laws of Texas can guide you through the complex maze of legislations, helping you protect your business to the maximum possible extent under the circumstance.
5. Can a trust help to protect my business in a Texas divorce?
Yes, creating an asset protection trust for your business assets can generally be very effective. However, it's equally important that these trust operations are set long before any signs of marital discord surface to avoid allegations of illegal asset transfers.
Choosing a Divorce Lawyer in Texas
Divorce is difficult but you do not have to navigate it alone. If you need support and want to connect about divorce, please contact our team of experienced attorneys at Bastine Law Group at 281-784-3222.