Business Valuation for Divorce
Texans who own their businesses face significant challenges when going through a divorce. Self-employed business owners, medical business owners, lawyers, and other professionals face the difficult task of evaluating and dividing their assets in a divorce. The more complex the business, the more difficult it is to value the business and divide it accurately.
Texas is a Community Property State When It Comes to Division of Business Assets
A Texas family court will divide all jointly held community property, including business assets, and distribute them to the spouses who are divorcing. Texas family law considers community property to be any property acquired during the marriage by either spouse in the union. If a spouse can demonstrate that he or she acquired property before the marriage began, then that spouse will keep that property. A court will not divide the property in the divorce proceeding.
Assigning a Value to a Business and Dividing can be Complicated in Divorce
If one spouse started or acquired business during the marriage, it is community property, and the court must divide it up between the spouses according to Texas law. Sometimes the business assets of spouse A are hidden in what seems to be a separate business.
In this situation, spouse B may walk away from the divorce without receiving his or her share of the business assets because the court categorized the assets as spouse A’s separate property. The attorneys at Bruce Turner Law thoroughly investigate our client’s businesses. We make sure that one spouse is not hiding assets that should be considered community property.
Valuation of Interests in Texas Corporations
Typically, Texas corporations are considered to be a separate legal entity. Texas courts often characterize corporations as separate property, not subject to community property division. A spouse’s interests in the corporation are community property in Texas, however.
One exception to this general rule exists, however. Sometimes a Texas family law court determines a Texas corporation to be the “alter ego” of one of the divorcing spouses. A court may transfer assets from the company and divide them among the divorcees. An “alter ego” happens when the corporate veil is pierced, meaning the business and the spouse are mostly the same.
Attorney Bruce Turner Successfully Fights for High Valuation of His Clients’ Businesses
Attorney Bruce Turner is well-known for succeeding in the area of business valuation on behalf of his clients. In one of his divorce cases, Attorney Bruce Turner discovered that his opposing counsel significantly undervalued a business owned by his client. He successfully negotiated on behalf of his client to raise the valuation of his client’s business, significantly boosting his clients’ settlement.
At Bruce Turner Law, we know that business valuations can quickly become complicated in divorce cases. We hire the best, highly-skilled valuation experts, CPAs, and any other necessary qualified professionals. It is worth putting the energy and time into fighting for fair business valuations that will help our clients receive the best Texas divorce settlement possible. If you are currently going through a divorce and you are concerned that poorly done business valuations will harm you, contact us today to request an appointment.