In a Texas divorce, there are several issues that are unique to considering a business as an asset in the property division. The normal property division issues of identification, characterization, valuation, and division each have intricacies for businesses that need to be considered.

Addressing the type of entity (corporation, partnership, sole proprietorship) is important because the rules for a Texas divorce differ depending on the type of entity.

Determining the date of formation of the business entity may be crucial to the characterization as either separate property or community property.

Any changes in the formation of the entity during the marriage could change the characterization and are an important factor to note.

And, vital to any business operating during a divorce is the question of how to continue to operate the business without suffering a devaluation of the interest while the divorce proceeds. The day-to-day operation issues and protecting the business’ ability to make profit flow through to the value that the business has to the marital estate and the parties individually.

Lastly, evaluation of where the customers come from, which is an essential component of determining the business’ commercial goodwill as a factor of value of the entity versus the owner’s personal goodwill which is not a marital asset, will be important.

Here is a video of a talk that I gave on The Business Owner’s Divorce — which is approved for 1.0 hours of Texas CLE Credit, Course # 174151052: The Business Owner’s Divorce

Here is the powerpoint paper referenced in my talk:

Small Business Issues in a Texas Divorce

Here are two other white papers that could be useful for representing a spouse in a Texas divorce when a business is at issue:

10 Documents to gather for business in divorce

Top Five Concerns Regarding Small Business Ownership and Divorce in Texas

 

 

 

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Photo of Michelle O'Neil Michelle O'Neil

Michelle May O’Neil has 27 years’ experience representing small business owners, professionals, and individuals in litigation related to family law matters such as divorce, child custody, and complex property division. Described by one lawyer as “a lethal combination of sweet-and-salty”, Ms. O’Neil exudes…

Michelle May O’Neil has 27 years’ experience representing small business owners, professionals, and individuals in litigation related to family law matters such as divorce, child custody, and complex property division. Described by one lawyer as “a lethal combination of sweet-and-salty”, Ms. O’Neil exudes genuine compassion for her client’s difficulties, yet she can be relentless when in pursuit of a client’s goals. One judge said of Ms. O’Neil, “She cannot be out-gunned, out-briefed, or out-lawyered!”

Family Law Specialist

Ms. O’Neil became a board-certified family law specialist by the Texas Board of Legal Specialization in 1997 and has maintained her certification since that time. While representing clients in litigation before the trial court is an important part of her practice, Ms. O’Neil also handles appellate matters in the trial court, courts of appeals and Texas Supreme Court. Lawyers frequently consult with Ms. O’Neil on their litigation cases about specialized legal issues requiring particularized attention both at the trial court and appellate levels. This gives her a unique perspective and depth of perception that benefits both her litigation and appellate clients.

Top Lawyers in Texas and America

Ms. O’Neil has been named to the list of Texas SuperLawyers for many years, 2011-2018, a peer-voted honor given to only about 5% of the lawyers in the state of Texas. In 2014-2018, Ms. O’Neil received the special honor of being named by Texas SuperLawyers as one of the Top 50 Women Lawyers in Texas, Top 100 Lawyers in Texas, and Top 100 Lawyers in DFW. She was named one of the Best Lawyers in America for 2016 and received an “A-V” peer review rating by Martindale-Hubbell Legal Directories for the highest quality legal ability and ethical standards.

Author and Speaker

A noted author, Ms. O’Neil released her second book Basics of Texas Divorce Law in November 2010, with a second edition released in 2013, and a third edition expected in 2015.  Her first book, All About Texas Law and Kids, was published in September 2009 by Texas Lawyer Press. In 2012, Ms. O’Neil co-authored the booklets What You Need To Know About Common Law Marriage In Texas and Social Study Evaluations.  The State Bar of Texas and other providers of continuing education for attorneys frequently enlist Ms. O’Neil to provide instruction to attorneys on topics of her expertise in the family law arena.