One of the top questions searched for on our website is “How to Protect Business Assets from Divorce In Texas?” For many business owners in Texas, owning your own company can give you the kind of independence you could not achieve in a different kind of work environment. Yet when divorce becomes a possibility, you may be concerned about whether your business assets will subject to distribution under Texas law, and how you might be able to protect business assets in your divorce. Our Dallas divorce lawyers can help.
Understand the Distinction Between Separate Property and Community Property
First, you should know that you may not need to take many additional steps to protect your business assets in divorce if those business assets are likely to be classified as separate property. Texas is a community property state which means that generally speaking, only community property will be divided (and separate property will not be divided). What is the difference between the two? According to the Texas Family Code, community property “consists of the property, other than separate property, acquired by either spouse during the marriage.” Separate property, differently, includes the following:
- Property owned by either spouse prior to the marriage
- Property acquired by either spouse during the marriage as a gift or through an inheritance
- Personal injury recovery from a lawsuit acquired by either spouse during the marriage
In other words, if you acquired your business assets prior to the marriage, or if you inherited the business during the marriage, as long as the property has not become commingled, you may not need to take additional steps to protect those assets since they will not be subject to division. Additionally, because assets are inside a business, the assets will most likely not be divisible by a court, but the interest in the business can be valued and divided.
Create a Postnuptial Agreement with Assistance from Your Lawyer
If any of your business assets are likely to be classified as community property, one way you can protect those assets is to enter into a postnuptial agreement with your spouse. Your Dallas divorce lawyer can help you to create this kind of agreement. It is similar to a prenuptial agreement in terms of what it can legally contain, but spouses enter into it after getting married (as opposed to before the marriage, like a prenuptial agreement). In a postnuptial agreement, you and your spouse can agree that your business assets will not be subject to division in divorce.
Consider a Texas Marital Settlement Agreement
Another option for protecting your business assets in a divorce is through a marital settlement agreement. While you will likely need to give up other assets in order to reach a settlement agreement with your spouse, entering into this type of agreement can allow you to keep your business intact and to protect assets from division during divorce.
Seek Advice from Our Dallas Divorce Lawyers
When you are going through a divorce in Texas and you own a business, it is critical to work with a Dallas divorce attorney who has experience representing clients in divorce cases involving business assets and other forms of complex property. One of the experienced lawyers at our firm can begin working with you today and can discuss options that may be available to protect your business assets in your divorce. Contact Orsinger, Nelson, Downing, and Anderson, LLP for more information.