In Texas, a business can be divided in a divorce through various methods. One way is for one party to retain the business while the other party is compensated financially. This often involves buying out the spouse’s share. The division of a business during a Texas divorce is determined based on the concept of community property, where assets acquired during the marriage are generally subject to division. The process typically involves characterization (determining if the business is community or separate property) and valuation. The court seeks to provide a just and right division, which may not always be an equal split, taking into account factors such as the source of the business’s goodwill and each spouse’s contribution to its success
.Texas is a community property state, which means that community property is subject to division upon divorce. Separate property, on the other hand, remains with the respective spouse. The division of a business can be complex, especially if it was started during the marriage with joint funds, making it community property. In such cases, determining the value of the business and each spouse’s ownership share is crucial. The need for hiring a professional to appraise the business and determine value is a likely scenario in these type of divorces.
