Business owners can benefit from advanced divorce planning

For business owners in Texas, divorce may be a particularly costly proposition. Beyond the immediate financial effects, entrepreneurs may face specific problems with the division or ongoing viability of their companies after a marital split. Because the repercussions can be severe, many business owners may want to develop a plan to help prevent the most serious consequences from befalling their businesses in the event of divorce. Indeed, many investors or other business partners may insist on divorce planning as part of taking an equity stake.

Business owners may be particularly well-placed to consider a prenuptial agreement or postnuptial contract. These agreements can reflect specific decisions about the future of the business in case of a divorce. Because entering into a "prenup" or "postnup" is a negotiation, both parties' interests should be represented. Indeed, in an effort to protect those interests, each party should be represented by legal counsel. These kinds of agreement may contain a number of provisions. For example, the agreement might spell out that the business is the separate property of the party who established it, especially if it was launched prior to the marriage.

Increases in the value of the business over the period of the marriage can be handled differently. The spouse may have a specific percentage interest in these increases, but the agreement could also specify that the division should take place through cash and other items rather than by dividing the business. When both spouses are partners in the company, the agreement could specify which person should buy out the other after a split.

Business owners considering divorce have additional considerations to protect their enterprises. A family law attorney can advise a divorcing spouse and work to achieve a fair settlement on issues such as property division and spousal support.

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