Even if you and your spouse understand the marriage is over, filing for divorce can be an emotional decision. It can mean the end of many things that have become comfortable and familiar, and it means starting in a new direction that may be unknown. If you are a business owner, you may worry that the end of your marriage means the end of your business. However, this is not necessarily so.
If you had the foresight to sign a prenuptial agreement to keep your business separate from marital assets, you would be wise to review that document with an attorney to ensure it is still valid and enforceable. If no such agreement exists, you can take steps to protect yourself financially before, during and after the divorce, and perhaps save your business in the process.
Examine your options
No matter how things turn out, you will need to have both your personal and business financial documents collected and in order. These include your bank statements, assets, investments and debts. Since Texas is a community property state, the court will split your joint assets and debts 50/50, so you will want an accurate accounting of those items that you and your spouse jointly own and those that are separate. If the business is marital property, you will have several choices:
- Purchase your spouse’s share and keep the company going.
- Trade other comparable assets for your spouse’s portion of the business.
- Draft a partnership agreement that will allow you to continue running the business with your spouse after your divorce.
- Sell the business and split the proceeds.
- Dissolve the business.
No matter how scrupulous you have been about keeping accurate and thorough records of your business finances, you will have to be more so now. Take notes whenever you discuss the business with your spouse, and ask your spouse to put any agreements in writing. Keep track of any financial transactions, whether they involve your business account or your joint personal account, and save any emails, texts or notes between you and your spouse.
Protect your future
It is not too early to begin building your new financial life by opening individual checking and savings accounts for yourself as well as your business. Review your credit report, and continue to monitor it closely during the divorce in case your spouse decides to spend freely and leave you with debt. Continue to keep records of your spending, and establish a budget based on your new financial reality.
Whether you continue your business or decide to let it go and start fresh after your divorce, you will benefit from solid advice about your legal options for the best chances of a positive post-divorce life.
