Considering that almost 50% of marriages today end in divorce, it is safe to assume that business owners in Texas are also at risk of dissolving their marriage. While many people think of the personal financial issues that divorce can bring about, there are also impacts on businesses.
Even if a divorce is considered uncontested, there can still be financial ramifications that impact everything that is considered property of one or both parties in the divorce. Marital property is defined as all income or assets obtained by either spouse during the marriage, which means that the profits that a business generated are subject to be a part of the divorce settlement. Whether someone lives in a community property state or an equitable distribution state, there is a good chance that money that has come into their business will be part of the final divorce decree.
The stress and emotional turmoil that is brought on by a divorce is virtually unparalleled. That mental anguish can result in attention being diverted from the business. While it may seem like going through divorce as a business owner just means having to attend some meetings with a lawyer or make a trip to the courthouse, there can be a direct impact on a business leader’s ability to effectively lead their company.
This stress becomes magnified if the business was owned by both parties in the divorce. There have been cases where a divorced couple had to continue running their business together no matter how ugly the divorce itself may have gotten.
Property division in a divorce goes far beyond dividing up cars, homes and liquid assets. The practice of negotiating the impact that a divorce has on a privately owned business may be best left to a divorce attorney. This attorney may review the current structure of the company, compare it to their state’s law and work to help their client maintain control of the business they built.