How will Texas courts divide business assets during divorce?

On Behalf of | May 16, 2023 | Divorce

Property division is one of the most contentious aspects of any divorce. Courts generally need to ensure the division’s outcome is fair to the spouses. The process often becomes incredibly complex when the court divides the spouses’ business assets.

What is community property?

Community property refers to how courts approach asset division during divorce. In community property states like Texas, the court usually divides only the couple’s properties accrued during their marriage. Those obtained before or after the marriage often fall under separate property.

Regarding business assets, only those companies created or bought within the marriage might count as marital property. If the business’s creation date is unclear, the spouse claiming the asset is separate usually has to provide evidence that it is.

How does the court divide business assets?

Different factors can influence which spouse receives which business assets. For instance, a small business owned by one spouse might go to the owner if it presents little relative value to the other spouse. However, the value of business growth or assets acquired during the marriage are likely marital property, subject to division during divorce.

Dividing a large business or corporation is often not as simple, especially if both spouses are co-owners. Because the court usually wants to preserve the company, they might award the business to one spouse and give real estate and other assets to the other spouse. This helps ensure the company stays in business while the other spouse gets a fair share of properties.

Business asset division is a complex matter because of the many factors that all parties must account for and how divorce laws tend to change over time. Being familiar with the latest standards for property division can help you better ensure positive outcomes during your divorce.

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