In a Texas divorce, when both or one of the spouses owns a business, the division of property division can become substantially more complicated. Determining the proper valuation of the business, including and the assets owned by the business, requires careful consideration. Is the business asset laden, or simply a stream of income. Is there “blue sky” or “goodwill” that adds extra value, or is the business merely a liability shell.
Then we must determine whether the business is community property, separate property, or is the characterization mixed. When determining community versus separate property of a business, some key factors to review are:
- The date of the marriage
- The date the business was founded
- Whose funds were used to start the business, or who obtained loans to start the business.
- How each spouse, during the marriage, contributed financially to the business and the contribution of labor by each spouse
- Is the business entity a partnership or corporation
- Has the value of the business increased during the marriage, and was that increase due to market conditions, time toil and talent of a spouse, or both
In a divorce in Texas, where one or more of the spouses own a business, it is crucial to have the professional legal representation of an attorney to protect your rights and your finances for the future! If you are a business owner or spouse of a business owner and you are involved in a divorce, contact attorney R. Jeffrey Burgfechtel for a free initial phone consultation today!