When a high-asset divorce involves a business, things can get complicated fast. You might be wondering who gets what and how Texas law looks at companies during a split. If one or both spouses own a business, it can be one of the most valuable things on the table.
Understanding community property in Texas
Texas follows community property law. That means most assets acquired during the marriage belong to both of you equally. This includes businesses started or grown while married. Even if one of you worked more in the business, it’s still usually considered shared. If the business existed before the marriage, only the increase in value during the marriage might be split.
How valuation plays a big role
Before anything gets divided, the business must be valued. This isn’t a quick estimate—it involves professional evaluations. Things like income, assets, debts, and future earning potential all factor into the business’s worth. Once there’s a number on it, you and your spouse can decide how to divide it. Sometimes, one of you keeps the business, and the other gets more of another asset, like property or retirement funds.
Options for division
There are a few ways to handle the business. One option is a buyout, where one spouse pays the other their share. Another option is co-ownership, where you both keep a stake in the business. This only works if you can still work together. Sometimes, selling the business and dividing the proceeds makes the most sense. The right option depends on your situation and how well you can cooperate.
Think ahead about tax consequences
Dividing a business may lead to taxes down the road. The sale of a business or the transfer of ownership can come with capital gains or other taxes. You should consider those when deciding what division makes the most financial sense. What seems fair now might cost more later if taxes aren’t factored in.