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Resolving Differences By Putting You And Your Family First

3 tactics that could protect your business during a divorce

| Dec 11, 2020 | Divorce |

Your business may be the most valuable thing that you own. Even if you have other assets that have more financial value, your business is an extension of yourself, making it emotionally valuable. It reflects years of hard work and investment.

Going through a divorce doesn’t just mean ending a relationship and changing your family dynamic. It also means that you may have to split up or even share the business you’ve built with your ex. You probably don’t like the idea of handing over business ownership or control to your ex in a divorce.

Thankfully, there are at least three different ways for you to proactively address your business in your upcoming divorce.

Sit down and negotiate a postnuptial agreement

If you feel like divorce is on the horizon, your spouse probably feels the same way. Divorce can be expensive and cause a lot of disruption to your life. It can also impact the happiness and well-being of your children.

You might be able to sit down now and create an agreement that will guide the division of property and other decisions in your divorce. A postnuptial agreement lets you set the terms that matter the most to you, like protecting your business. You will need to be ready to potentially compromise with your spouse on other details in order to get what you want.

Demonstrates that the business is your separate property

The Texas family courts will typically only split up the assets and debts that belong jointly to both spouses. If you inherited the business or had already started it when you got married, you may be able to claim that the business was and remains your separate property. That can prevent your spouse from claiming any of its value in the divorce.

Expose your liabilities and seek an honest valuation

Especially if the business is particularly new or its equipment and facilities are particularly old, the company could be more of a liability than an asset on paper. Since your spouse can only claim a share of the business’s total value, developing a strategy that reduces the value of the business in the eyes of the courts can be a way to prevent your spouse from claiming much of the business in your divorce.

Whatever approach you take, you need to stay focused on the big-picture goal of protecting your business when preparing for your upcoming divorce.

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