What Happens to Our Family-Owned Restaurant If We Get Divorced?

 Posted on August 13, 2021 in Property Division

Reaching the conclusion that a marriage is beyond saying is an emotionally-charged realization for any couple. However, spouses who own a family business such as a restaurant have an extra layer of difficulty. If you or your spouse own a restaurant or other business, you may be unsure of what will happen if you divorce. Will we split ownership of the business 50/50? Should we sell the business? Situations like this are difficult to figure out – legally, financially, and personally. Consequently, it is highly recommended that business owners seeking a divorce work with a skilled attorney.

Who Has a Right to the Business?

As with any property division concern, divorcing spouses may be able to negotiate an agreement about how to divide assets. However, if the issue is litigated, it is important to understand how Texas property division laws apply to family businesses. Texas courts follow “community property” rules when dividing assets in a divorce. Property that a spouse owned before getting married is separate property. Marital property, on the other hand, is jointly held by both spouses. Most property that a spouse acquires during the marriage is considered marital property. However, the identity of an asset as marital or separate can change. For example, a business that a spouse owned before getting married may become marital property if the other spouse spent time, money, or resources growing the business.

Valuing Your Family Restaurant in a Divorce  

Before you can have a meaningful conversation about what to do with a family restaurant during divorce, you need to know the restaurant’s value. A financial professional experienced in valuing family businesses can determine the best method for reaching an accurate value. Once you know what the restaurant is worth, you can decide how to proceed.

Should We Sell the Business or Keep it?

When you own a family business such as a restaurant, the business’s value is not only financial. If you are like many small and medium-sized business owners, you probably put extensive time and effort into building your business. Understandably, it probably has great personal significance to you. This may make you hesitant to sell the business during the divorce. However, for some couples, selling the business and splitting the proceeds is the best option during divorce. For other couples, it makes sense for one spouse to retain ownership of the business and the other spouse to retain ownership of other assets such as the marital home or vehicles. Some divorcing couples decide to continue running the business together after the divorce as business partners.

Contact a Collin County Divorce Lawyer

If you are a business owner and you are planning to divorce, contact Frisco family law attorney Linda Risinger for help. With over 30 years of experience in family law, Linda is qualified to handle complex divorce cases involving business assets, property division disputes, and more. Call 972-294-6533 for a free consultation today.

Source:

https://statutes.capitol.texas.gov/Docs/FA/htm/FA.6.htm