If you are thinking about getting a divorce, concerns about your financial future will doubtlessly run very high. Worries about money and the children are the top two contributors to sleepless nights for divorcing spouses.
If you own a business with your spouse, and especially if you rely totally or partially on the business income to support you, the thought of divorce may be especially troubling.
There is no way to sugarcoat the truth: spouses who own a business together will almost certainly find the divorce process more complicated and more emotionally exhausting than spouses who do not. This does not mean, however, that you should stay in a marriage solely because you don’t know what to do about the business you own with your spouse. You have options besides walking away or continuing to work alongside a spouse you no longer want in your life.
Here are things you should know if you are thinking about divorce and worried about a joint business.
- Who owns the business? Texas is a community property state. This means that assets acquired or improved during the marriage are to be shared equally between the spouses in a divorce. So, even if your spouse started the business before you married, you may still have a legal right to some percentage of ownership based on contributions you made to the business’s operation during the marriage.
- A buyout doesn’t necessarily require cash. If you want to sell your ownership, or if you want your spouse to sell his or her ownership, you may be able to trade other assets rather than having to come up with cash.
- Take care of the business during the divorce process. Just as a divorce court judge can issue a temporary order for the care and support of children while a divorce is pending, a judge may also be able to issue a temporary order regarding the operation of your jointly owned business. This may be important to prevent the other spouse from wasting assets or sabotaging the business. It may also be a good idea if you cannot agree on basic operation decisions – the judge may order you to hire a receiver, who can act as a temporary manager.
- Maybe you can work together. It is uncommon, but not unheard of, for spouses to realize that they can maintain a working relationship but not a personal one. If your honest self-evaluation tells you that you can manage a continuing business relationship with your ex, by all means – consider it. A recent article in The New York Times describes one such couple’s adventures in business ownership both during and after their marriage.
Contact Kevin Buchanan for Answers to Questions About Division of Assets During Divorce
Attorney Kevin Buchanan is a Dallas attorney offering family law clients skillful and experienced representation. He places a strong emphasis on fairness, and on treating all clients with dignity and respect. If you have questions about your rights with regard to a jointly owned business, he would be pleased to review your circumstances and offer his opinion. To schedule a private consultation, fill out the online intake form or call (214) 378-9500.