Plano, TX Business Owner Divorce Attorney
Lawyer for Valuation and Division of Business Assets in Collin and Dallas County
Many business owners go to great lengths to compartmentalize their professional and family lives. However, during the divorce process, it is impossible to ignore how closely these two facets of life are intertwined from a legal standpoint. Whether you and your spouse operate a family business together or you operate your own business with no involvement from your spouse, there is a good chance that your business will influence the division of marital property and other aspects of your divorce.
Divorcing business owners should work with an attorney who understands the specific challenges they will face. At the Law Office of Brian Bagley, we have represented many business owners throughout our 10 years of practicing divorce law. We will work closely with you to understand the unique details of your case and pursue the best possible option for protecting or dividing your business assets in the divorce.
Is My Business Community or Separate Property?
Whether your business is subject to division in your divorce depends on whether it qualifies as separate or community property. A business that you owned before getting married, or a family business that you received as an inheritance during your marriage, will likely be considered your separate property. This means that it belongs to you alone, and your spouse does not have a claim to it.
However, a business that you started or acquired during your marriage will be considered community property by default, regardless of your spouse's involvement or lack thereof. This means that your spouse has a claim to its value, and you will need to consider it when dividing all assets belonging to the marital estate. Even when a business is considered separate property, income that the business earns during the marriage is often considered community property as well.
One of the best ways to protect your business assets throughout your marriage and in the event of a divorce is to ask your spouse to sign a prenuptial agreement that clarifies their status as separate property. If you found or acquire a business during your marriage, it is a good idea to consider a postnuptial agreement to address this significant change in your financial situation.
Business Valuation and Division in a Texas Divorce
If your business is part of your community property, it is important to obtain a valuation in preparation for your divorce so that you understand how it will factor into the property division agreement. There are many different methods for valuing a business depending on the situation. For example, if your business is publicly traded or has independent market value, the valuation may be based on its stock price or the selling price it could fetch on the market. On the other hand, if it is a professional practice or small business, the valuation may be based on its income and expenses, assets and liabilities, or even the goodwill value that you contribute as the owner.
With a solid understanding of what your business is worth, you can then consider how to approach property division negotiations or litigation. Some options for business owners include:
- Selling the business - If the business has market value and interested buyers, selling it and dividing the profits evenly with your spouse may be a viable solution. That said, it is often possible to negotiate a more desirable arrangement with your spouse.
- Compensating your spouse for their share - Many business owners are understandably reluctant to give up their business, especially if it serves as their primary source of income. Furthermore, attempting to sell makes little sense when a business derives its value primarily from the owner's efforts and skills. In these cases, you may be able to negotiate for sole ownership of your business and compensate your spouse with other assets of a fair value, whether in the form of cash payments or other properties.
- Remaining joint owners or business partners - If you and your spouse worked closely as business partners and your divorce is amicable, you may be able to continue owning and operating the business together despite the failure of your marriage. In this case, it is important to create a clearly defined partnership agreement.
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This office is a top-notch law firm. My issues were handled efficiently and skillfully to my satisfaction. Kristen and Gwen ...Pamela S.
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This team is the absolute best! Professional, speedy and gets the job done. Kristen is quick to respond and get what you need ...Kristan C.
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Brian Bagley and Kristin Tinker were outstanding to work with from day one! Very professional, very attentive, and really ...Former Client
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I had the best experience with Brian and his staff at Bagley Law Firm. So professional, and timely and kept me calm as they ...Tina B.
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From the first meeting with Brian, he exuded confidence in his knowledge of legal matters. Always very honest, ...Jared C.
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Although I didn't get the exact result I was hoping for, I got the results that I needed! Brian and his team were more than ...Lyndell B.