If you are seeking a divorce in Texas and either you or your spouse owns a business that was started during the time of the marriage, it is likely this is going to become a contested issue in your divorce. Determining the value of a business is much more complicated than determining the value of real property. While looking at comparable sales in the same area is an excellent place to start, no two businesses are exactly alike, so several approaches to determining a business’ value must be employed in order to arrive at a final determination of value.

Your attorney will discuss options with you at the outset of your case, but it is likely that you will want to employ a business valuator to examine the business and provide their opinion as to the value of the business. You and your spouse might agree to start the process by hiring a joint business valuator and then seeing what their report says before hiring your own expert. While this may be somewhat costly, the expertise that a business valuator brings to the table cannot be underestimated. Business valuation concepts are incredibly complex, so if your case goes to trial, you will need someone who is an expert in the field to provide testimony to the Judge that explains in clear and precise terms how and why they arrived at their valuation.

The business valuator is going to look at the factors outlined in Revenue Ruling 59-60 to start the valuation. These factors are listed below:

  • Nature and history of the business
  • Economic and industry conditions
  • Book value and financial condition
  • Earning capacity
  • Dividend paying capacity
  • Goodwill or other intangible value
  • Prior sales of the stock and percentage of the business being valued
  • Market price for corporations in the same, or similar, line of business
    In order to begin their work, the business valuator will need to examine certain business documents, such as those listed below:
  • Business Tax Returns
  • Income Statements
  • Balance Sheets
  • Sales or Operating Budgets
  • Payroll Data
  • Summary of Inventory
  • Summary of Assets
  • Employment Contracts
  • Intellectual Property
  • Incorporation Documents
  • Financial Forecasts
  • Business Organizational Chart
  • Bank Statements
  • Accounts Receivable Report
  • Depreciation Schedules
  • Summary of Dividends and Distributions
  • Any other pertinent contractual documents (i.e. licensing agreements, nondisclosure agreements, etc.)

Once the business valuator has gathered and reviewed all of the necessary financial documents, they will schedule interviews with the owner spouse and other key executives. After compiling all of the necessary data, and conducting the necessary interviews and onsite inspections, the business valuator will compile a report that will be reviewed by the attorneys for use in court. It will take some time to receive the written report, but the findings contained within will be crucial to arriving at a fair and equitable distribution of the community estate.

Valuing a business in a divorce is one of the most complex issues involved in your divorce. Make sure to discuss these matters with your attorney in your initial consultation to make the most use of your time.

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Video Transcription:

Things not to do during your divorce process. Don’t date. Don’t do drugs. Don’t drink and drive. Don’t use your children as pawns or put them in the middle. Don’t dredge on the past of your divorce process. Let the past be the past. We’re trying to move forward. It’s not gonna be beneficial emotionally or financially for you to focus on the past when we’re trying to get you moving forward. If you need counseling to deal with issues in the past, that’s probably a good idea to seek counseling or a support group in some form or fashion. Let us guide you in the divorce process and make sure you don’t step in any of those land mines in moving forward. We wanna make sure you get through the divorce process in the least financially impacting way and the most beneficial for you family and your situation.

Ramos Law Group, PLLC, your family law team of experts.

Video Transcription by Speechpad.com.

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Divorces involving significant amounts of money, property, and other assets are almost always more complicated than standard divorces. High net worth divorces are rarely uncontested, which is why it is critical to have a good divorce attorney in Houston if you want to retain what property is rightfully yours. It is essential that you hire a reputable attorney to give you legal advice specific to your personal situation,, as every single divorce is completely different. When it comes to your livelihood, there is no room for risk or error. For the best possible results, hire an exceptional attorney at Ramos law Firm.

Issues that Arise from a High Net Worth Divorces

There are endless complications that can stem from a high net worth divorce. One common issue is the allocation of an inheritance. When someone is given a significant amount of money by a family member, they naturally assume that it is theirs alone. However, a spouse with a good divorce attorney in Houston may be able to recover a portion of that income, regardless of who the intended beneficiary was. It is up to you and your lawyer to take steps to protect your assets and keep what is rightfully yours.

If there are children involved, a high net worth divorce can be even more complex. The judge will need to evaluate how much child support is going to be paid. However, this goes beyond simply determining who will pay for the child’s financial needs. If the child has extracurricular activities that cost money, medical needs, or any other additional expenses, the judge will need to decide who is required to pay these costs. This is why having a divorce attorney in Houston is so critical. With the help of exceptional legal assistance, you will be able to protect yourself from overpaying while also keeping the best interest of your children at the forefront.

How to Proceed

As you go through the divorce procedures, there will be certain requirements that can have severe financial penalties if neglected. Forgetting to sign one paper, overlooking deadlines, or failing to respond properly can have significant monetary ramifications. Additionally, one simple error can give the other spouse a substantial advantage, which can be impossible to recover from. An exceptional divorce attorney in Houston like Ramos Law Group, PLLC will make sure that all of your affairs are completely in order, ensuring that you never have to pay any penalties.

Hiring a Tracing Expert

Both spouses will hire a tracing expert, who will determine what the spouses’ estate is worth. This is a very important step, as undervaluing your assets can cause you to lose money in the long run. For instance, if both spouses own a business together, it is crucial that the value of the business is determined accurately, as it is highly unlikely that both spouses will retain ownership. This step is also necessary to prove private property and community property. If you entered the marriage owning something, it is important to establish that it is privately owned, and not joint property.

Hire Ramos Law Group, PLLC for the Best Results

Here at Ramos Law Group, PLLC, we take great pride in our expertise and years of first-hand experience. If you want unrivaled legal assistance, we will provide you with the best divorce attorney in Houston. Don’t gamble with your income and assets. You want to keep the property that is rightfully yours, and our skilled legal professionals will make sure that you are pleased with the end results. Call 713-225-6200 today and see why Ramos Law Group, PLLC has consistently satisfied clients and an unblemished track record.

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Different states have varying policies when it comes to divorce. There are some states that recognize all property and income earned by a married couple as belonging equally to both of them, and Texas is one of those states. This is what is known as community property state. Regardless of whose name is on the deed or ownership papers, both spouses have equal ownership of most assets acquired during the marriage, with certain exceptions. If you want to protect your assets, it is very important to talk to a divorce lawyer in Houston, Texas.

Determining Separate Property
separating property divorce
During divorce proceedings, the court presumes that all assets are community property. If certain property is yours and only yours, it will be necessary to prove that it is separate property – not community property. Separate property includes, but is not limited to, the following:

  • Property that was previously owned by the spouse before the marriage
  • Property that was acquired by gift or inheritance
  • Certain kinds of recoveries for personal injuries

Naturally, you are going to need to prove that your separate property is indeed yours. This can be difficult if you are not familiar or comfortable with the legal system. Having a divorce lawyer in Houston, TX on your side is going to drastically improve the chances of getting the desired results. You should never attempt to go into a legal situation without proper representation and consultation – especially when your assets are at stake.

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Tangible and Intangible Property

There are many different types of assets that will need to be divided. The most common are houses, personal property like jewelry, clothing, furniture, and other physical goods, as well as intangible property like benefits, dividends, and income. Splitting community property can also means equally splitting debt. This can be a daunting revelation for many spouses who did not realize that debt even existed. That is why it is so important to have a divorce lawyer in Houston, Texas to help you to prove ownership (or lack thereof) of community and separate property.

Spousal Support

legal advice splitting assets

In addition to splitting assets, it may be necessary for one spouse to pay spousal support to the other. Spousal support sometimes occurs when one spouse earns more income than the other, and divorce would cause the spouse seeking support to no longer be able to support their basic needs. The court will consider many different factors to determine with spousal support, often referred to as alimony, is appropriate. Again, the right divorce lawyer in Houston, Texas will be able to help you receive or keep what is rightfully yours during this trying time.

Protect Your Property with a Reputable Attorney

Divorce proceedings can be difficult, overwhelming, and quite complex. Attempting to navigate these harsh channels on your own can be quite costly. As you go through these changes in your life, it is essential that you have proper legal counsel. Ramos Law Group, PLLC has the skills and expertise to help you every step of the way. Don’t let divorce get the best of you – call Ramos Law Group, PLLC today.

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