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Divorce Proofing Your Business

Although separating from a spouse is never easy, a divorce may also present unique challenges for business owners. The last thing you want is for a divorce to cause damage to your company. No matter the nature of your business, there are steps that you can take to help protect your business. 

At the Ramos Law Group, PLLC, our divorce lawyers for business owners have extensive experience representing clients who have a wide range of business interests—from big corporations to home-based sole proprietorships. Here we offer five tips for divorce proofing your Texas business. 


1. Consider a Prenuptial or Postnuptial Agreement


As a starting point, you should consider whether or not a marital agreement makes sense for your specific circumstances. Essentially, prenups and postnups are simply written agreements that settle a couple’s financial affairs in the event of a future separation. If you are a business owner who is preparing to get married, a prenuptial agreement may be an advisable option. If you are a business owner who is already married, you may still be able to create a postnuptial agreement that protects your business interests. Texas has strict rules and regulations that govern marital agreements—so you should consult with an attorney if you are considering one. 


2. Create a Clear and Well Documented Separation of the Business


To the maximum extent possible, your commercial finances and personal finances should be kept separate. When blended together, a business may become quite vulnerable in a divorce. Indeed, one of the biggest divorce-related mistakes that business owners make is blending their assets. Small business owners often run into problems when they have not clearly separated their business from their personal assets. Avoid using your personal (marital) property to further the interests of your company. The more clearly your business and your personal finances are kept separate, the easier it will be to keep your company out of divorce proceedings. 


3. Maintain Carefully Organized, Comprehensive Business Records 


Problems arise when business records are a mess. When you have well-organized, comprehensive financial records, it will be a lot easier to protect your business interests and keep the company out of divorce proceedings. When you are working with ambiguous records, it allows a non-business owner spouse to make a claim against the company. Ambiguity in financial records is a point of vulnerability. Divorce proof your business with well-organized documentation and financial accounting. Accurate, detailed business records can be the difference between a relatively smooth divorce and one that causes serious damage to the company.    


4. Make Sure You Know the Value of Your Company


In some circumstances, a spouse will have a claim to part of the value of their partner’s business. That fact is simply unavoidable under Texas law as Texas is a community property state. While not true in every case, a business that was not protected by a prenup/postnup, formed after the marriage, and/or funded with marital assets may be deemed community property under Texas law. 

If you believe that your spouse may have some claim to the value of the business, you need to know exactly what your company is worth and where the value is derived. A Texas business owner should seek a professional business valuation as soon as possible in the divorce process, or even before the divorce is initiated if possible. Only when you know the true value of your business will you best be able to protect it in a divorce. 


5. Be Proactive in Resolving Your Divorce 


Finally, business owners who are going through a divorce should always take a proactive approach to protect their company. To best preserve the value of your business, it is useful to look for a low conflict, mutually beneficial solution that protects that company from any harm. For business owners and non-business owners alike, a settlement is almost always the best outcome in a divorce. 

In many cases, divorcing spouses have shared interests—especially when it comes to making sure that the business continues to be successful and profitable. Even if a settlement is not possible, it is important to stay ahead of the game. Consult with a Houston divorce attorney who can review your case and help you take the appropriate action to protect your interests. 

We Represent Business Owners in Divorce in Southeast Texas

At the Ramos Law Group, PLLC, our Texas divorce lawyers have deep experience representing business owners. We will protect your legal rights and financial interests. To request a completely confidential consultation with a top-rated family law attorney, please contact our legal team today. With offices in Houston, Sugar Land, and The Woodlands, we represent business owners throughout Southeast Texas. 


Last Updated on November 24, 2021 by Mary E. Ramos

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Mary E. Ramos

Mary E. Ramos is Board Certified in Family Law by the Texas Board of Legal Specialization. She is recognized and respected throughout the Houston legal community for dedication in effectively representing clients’ rights and interests. Mary understands the emotional side of divorce and brings a special compassion to each and every case.

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