What happens to your family business during a divorce in Texas?

Running a successful business in The Woodlands is no easy feat. You have the right to feel protective of it, especially if you are facing a divorce. Understanding the laws on property division in Texas is essential for fighting for what is yours.

What community property means in a divorce
Under the Texas Family Code, the courts presume that all property you hold at the time of divorce is community property. This means that a judge will assess all the marital estate’s assets and liabilities, including your business. However, you can rebut this presumption by providing clear and convincing evidence, which can include:

• Formation documents: Use these to show that you founded the business before the date of marriage.
• Bank records: Present these to trace the original capital.
• Corroborative testimony: Provide affidavits from business partners, accountants or financial advisors that support the source of the initial capital.

When it comes to family businesses, the courts determine ownership under the inception-of-title rule. Your company remains separate property if you started it before the marriage or acquired it as an inheritance. However, this can count as community property if you formed it during the marriage.

Why business assets are complex
Even if you prove the business is a separate property, your spouse may file for a Claim for Reimbursement. They may have the right to receive compensation for the enhancement in value if you used community funds to renovate your office or buy new equipment.

Facing the issue with legal help
In Texas, the courts can be strict when it comes to property division. Navigating these complex statutes alone is a risk you cannot afford. To protect what you have built, seeking legal counsel is the first step in fighting for your business in The Woodlands.

Vernier & Associates, PLLC

Visit Our Business Listing Visit Website