Many people in Dallas take pride in owning and operating their own businesses. If a married business owner decides to divorce, though, the business may become a point of contention, as it is not uncommon for the business owner and their spouse to disagree over whether the business and its assets are considered community property that is subject to division by the courts. If you intend to seek a divorce and you or your spouse own interest in a company, it is smart to talk to a lawyer as soon as possible about your rights with regard to business assets and divorce. The trusted Dallas divorce attorneys of McClure Law Group are proficient at handling complex divorce actions, and if we represent you, we will help you fight to safeguard your interests.
Property Division in Texas DivorcesTexas is one of few community property states. In other words, Texas law views most property either spouse acquires during a marriage as marital property, which means the spouses both hold interest in. There are exceptions for gifts, property obtained via descent or devise, and compensation awarded for personal injury that does not represent lost income. Any community asset is divisible by the courts in divorce actions in a manner that they consider just and right, in consideration of the rights of the parties. This does not necessarily mean that such property will be divided equally, however.
Separate property, which is property that either party owned prior to the marriage or that falls under a community property exception, is the sole property of one spouse. Property can also be deemed separate via a prenuptial or post-marital agreement. Separate property is not divisible in marriage but remains the singular property of one spouse.
Business Assets and DivorceWhether business assets are divisible in divorce depends on numerous factors. First, the courts will assess the nature of the business. In most instances, regardless of what interest either spouse holds in a business, the business’s assets will be considered the property of the business and not the community or separate property of the parties.
In other words, some business forms, like limited liability companies and corporations, are deemed legal entities that are separate from the parties that own shares or interests in the business. As such, the business assets of corporations and limited liability companies are not considered either separate or community property with regard to property division in Texas divorces.
Further, such assets should have no bearing on how the courts make determinations regarding what is right and just when it comes to dividing community assets. Instead, the courts will assess the parties’ interests in the business itself, and not the company’s specific assets, to determine whether it is separate or community property and, if it is community property, how it should be disbursed.
It is important to note, however, that the same standard does not apply to sole proprietorships. Rather, sole proprietorships are not considered separate legal entities but are merely extensions of the owner. As such, the assets of a sole proprietorship are effectively the property of the owner and may be assessed by the courts for property division purposes in divorce actions.
Talk to a Skilled Dallas AttorneyBusiness owners who wish to end their marriage are often worried about their business assets, but in many instances, such assets are not divisible in divorce. If you have questions about business assets and divorce, it is in your best interest to talk to a lawyer about your options for protecting your property. The skilled Dallas lawyers of McClure Law Group are well-versed in what it takes to obtain favorable outcomes in divorce actions, and if you engage our services, we will zealously advocate on your behalf. Our primary office is located in Dallas, and we have a Collin-County office in Plano where we are available to meet clients by appointment. We often represent parties in divorce cases in Dallas, Fort Worth, Rockwall, Frisco, McKinney, Irving, Richardson, and Garland. We aid people with family law issues in cities in Dallas, Collin, Denton, Rockwall, Tarrant, and Grayson Counties as well. You can reach us by using our online form or calling 214.692.8200 to set up a confidential consultation.