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I Started My Business Before Marriage: What is My Spouse Entitled to During Divorce?

In community property states such as Texas, all property acquired before marriage is considered separate and continues to belong to each individual in the event of divorce. Therefore, if your business began before you were married, then your spouse may not be entitled to any of it. However, if your business increased in value while you were married or your spouse contributed in any way, then it will be considered marital property, which means that it will be subject to division upon divorce.


Marital property in Texas is subject to equitable distribution, and determining exactly what your spouse is owed is complex. It is essential that you have the support of an experienced divorce attorney who can help protect your assets and your financial security moving forward. The outcome of your divorce decree is legally binding, so you should take great care to ensure that it is fair and just.


At Youngblood Law, PLLC, we have extensive experience helping clients through divorces that involve complex or high-value assets such as self-owned businesses. We have a wealth of resources and an in-depth understanding of the laws and regulations that are relevant to your case. We will act as your advocate in every negotiation or court litigation to secure the best possible outcome.


Arrange a free consultation with a family law attorney today and begin to build a roadmap to your future. Contact us today at 817-369-3970.

Property Division a Texas Divorce

Texas is a community property state where all property is divided into separate and community.


Separate property is the term used to describe assets that you or your spouse owned before you married, as well as inheritance and gifts that were given to one spouse. Separate property remains separate even in the event of divorce.


However, even if you began your business before marriage, it does not necessarily mean that it will remain separate. If your business increased in value, its assets became mixed with marital assets, or your spouse contributed in any way either through labor or financially, then it could be considered community property.


Community property is the term used for assets that were acquired during the course of the marriage by either spouse. In Texas, community property is subject to equitable division.


An equitable division often equates to an equal split. However, division can also be unequal if fair, given the circumstances. Factors such as the ability of each spouse to earn money, the contributions of each spouse, and the custody arrangement could all affect how property is distributed.

What if I Have a Prenuptial Agreement?

If you protected your business ownership in a prenuptial agreement or a postnuptial agreement, then this may prevent it from becoming community property. However, these types of agreements are not always enforceable, especially if it would place your spouse in financial hardship. Your attorney can look over your agreement and advise you on your next steps.

What Will Happen to My Business When We Divorce?

If your business is considered community property then you may be worried about what will happen to it. As a business owner, you have worked hard to establish yourself, and you may not want to lose that. Fortunately, there are many options available, and your attorney will work with you to determine what is the most appropriate in your case.

Both Spouses Own The Business

In some situations, both spouses could continue to own a business after a divorce. This may be the best option for you if your spouse is heavily involved in your business and you feel able to retain a strong and amicable working relationship.


However, it is rare for divorcing spouses to be able to work together after the divorce which can create problems later down the line.

Sell The Business and Divide The Profits

Some people choose to sell their businesses and divide the profits. This could allow both spouses to start fresh and invest in their own business ventures. However, many business owners do not want to sell a business that they have worked so hard to create. In addition, if that business is still providing for you and your children, then selling it could be detrimental for everyone involved.

A Percentage of The Business Assets or Income Goes to Your Spouse

In order to keep your business, you may be able to negotiate an agreement with your spouse where they receive a percentage of the business assets or income.

Buy out Your Spouse

A final option is to buy out your spouse either with cash or liquid assets. For example, you could enter an arrangement whereby they keep the family home in exchange for you keeping your business. If your business holds a high value, then you could also enter a structured settlement that will buy out your spouse over time.

How do I Determine the Value of the Business?

Before you can decide how to handle your business, you need to know what it is worth. Most of the time both spouses will seek a valuation of the business which will create a basis from which your attorneys can mediate an agreement. The valuations are likely to be a little different, so you will need to decide how to deal with the discrepancy before you can decide on your next steps.


A business appraiser could take various approaches to value your business, such as:


  • Market Approach – The market approach considers what similar businesses have sold for in your area. However, even a business that works in the same industry can be very different and so this method can be contentious.
  • Asset Approach – The asset approach values your business by considering the worth of all its assets. This includes intangible assets such as the name and brand, the value of which can be highly subjective.
  • Income Valuation Approach – The income approach considers how much income the business generated over a specific time period to determine its value.

I Started My Business Before Marriage: What is My Spouse Entitled to During Divorce

If you started your business before you were married, then your spouse might not be entitled to anything. However, it is likely that they will still be entitled to an equitable division of your business. That does not mean that you will lose your business, there are many different options available depending on the specific circumstances of your case.


In order to protect your business and your financial security you need the support of an experienced attorney. At Youngblood Law, PLLC, we have a wealth of experience in cases involving complex assets such as self-owned businesses. We will use low-conflict strategies to help you and your spouse come to an agreement that supports you and your family going forward. That being said, we will also be prepared to advocate on your behalf in front of a Judge if necessary.


Our lawyers will work tirelessly to ensure a fair outcome for your business and other assets so that you can feel confident about your future. We will guide you through the entire divorce process and will help secure just outcomes on issues such as child custody, child support, and alimony.


Contact us today and arrange a free consultation with an experienced divorce attorney at 817-369-3970.

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