Do I Have to Split My Business If We Get Divorced?
In Texas, most property acquired during a marriage is considered community property and must be divided in a divorce as the family law judge deems “just and right.” The general rule is that all marital property is presumed to be community property unless a party can prove otherwise.
Property which is not considered community property is known as separate property. Separate property is most often excepted from community property for one of these reasons:
- Property was owned by one of the parties prior to the marriage
- Property was inherited by only one spouse and kept separate from the marital estate
- Gifts were received by one spouse and kept separate from the marital estate
- Damages were awarded to one spouse for personal injuries
If one of the spouses owns a business or professional practice, it will be considered community property to the degree the business was developed during the marriage. Even if one spouse started the business before the marriage, the business should be appraised by a qualified appraiser. Any growth in business value during the course of the marriage will be included in the total marital assets to be divided.
It is important to note that only the value or a portion of the value of a business is included in assessing marital property. The business does not necessarily need to be dismantled and divided — parties can agree who gets the business and which other assets the other spouse should take in lieu of an ownership interest in the business. If the parties cannot agree who gets the business, the judge will decide whether to liquidate the business or include it in one party's portion of the marital assets.
Make sure the value of business assets and ownership rights are properly documented in your divorce proceedings. Let the experienced family law attorneys at Peterson Law Group review your situation and discuss which options are best for you. At Peterson Law Group, we have significant experience in family law, estate planning, and business law cases. To schedule a consultation, call us today at 979-703-7014.