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Entrepreneurship can complicate divorce

For entrepreneurs in Texas who are married, their businesses may very well be their largest assets. If an entrepreneur's spouse desires a piece of his or her business in their divorce settlement, being sharp-eyed regarding its future growth potential and value is critical. Likewise, being cognizant of the business' debts or liabilities is important.

Obtaining a valuation of the business is an essential step in property division during a divorce proceeding. A forensic accountant may be necessary to pinpoint missing financial information before an appraiser provides a final valuation. Then, once an appraiser determines a business' value, the assets can be divided. However, figuring out whether to sell the business or split the business up can be complicated.

In many divorce cases, the spouse who owns the business venture will not sell it. Instead, he or she will simply substitute another piece of property for the value he or she owes. If a business was started prior to the marriage, however, figuring out how much is owed can be relatively tricky.

If the two spouses can come to an agreement on how to address a business and other high-value assets, such as real estate or a motor vehicle, they can avoid further court intrusion. However, if they cannot see eye to eye on property division, they will have to go to trial, where a divorce judge will ultimately determine how their assets should be divided. Texas is a community property state, so a judge will look at numerous factors before dividing all assets accumulated during the marriage 50-50.

Source: forbes.com, "How Divorcing Women Entrepreneurs Can Get What They Deserve", Kerry Hannon, Nov. 2, 2017

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