The divorce process can be challenging for all Texas couples. However, even more complications can arise if one or both spouses own a private company. Some divorces have led to companies being sold or split up. In fact, many investors require a prenuptial or postnuptial agreement on how the company will be handled in a divorce before they decide to sink funds into a privately held corporation. However, it’s possible to negotiate a business divorce that leads to a successful, acceptable outcome for both spouses.
Each divorce is unique, but certain concerns are common for separating spouses with significant holdings in a private company. Disputes over how to divide those shares equitably may lead to ongoing problems in the property division process. In many cases, one spouse may turn over their ownership shares to the other spouse in exchange for some form of compensation. Here, the valuation of the business may be at issue, as the two parties may differ. An independent evaluation can be an important tool in obtaining a fair asset division settlement. It may also be important to consider issues like legal liability and intellectual property for the business at the same time that the financial assets are handled.
Of course, this solution can pose an additional challenge when there is insufficient cash or property to trade for the spouse’s shares in a highly valued business. There are various creative solutions that people may use, including a payoff period for the spouse’s interest that lasts for several years after the divorce with an agreement about how business operations will be handled during that time.
Business owners face particular challenges during the divorce process, but it is possible to emerge successfully. A family law attorney could help a divorcing business owner to negotiate a fair settlement on asset division.