When Is a Business Considered Marital Property in Texas?

 Posted on February 12, 2025 in Divorce

Dividing and valuing a business in a divorce is complicated. A judge will consider several factors before making a final decision on whether your business will be considered community or separate property, and some take precedence over others. If you are losing sleep over the fate of your company, you should speak with a Texas family law attorney who can provide you with legal advice and representation.

At Brandon Wong & Associates, our divorce lawyer is qualified to help you address your concerns about your family business. Attorney Brandon Wong has been practicing family law for well over a decade, and he knows how to advocate for his clients’ best interests in difficult divorces.

When Was the Business Established?

Timing is an important factor in categorizing a business as community or separate property. As a general rule, if you bought or created the business during your marriage, it is more likely to be considered community property.

There are exceptions to this rule, however. If you received the business through an inheritance, it might not be considered community property. That being said, a business acquired as a gift can still end up commingled between you and your spouse. If you want to keep a newly acquired business from being divided, you could sign a postnuptial agreement with your spouse that addresses this.

Did The Business Grow During the Marriage?

If the value of your business increased over the course of your marriage, it could be considered community property. This applies even if you established the business before the marriage. The income and earnings of each spouse are assumed to be community property unless proven otherwise in court.

A business’s growth will have to be properly valued before it can be divided. Common methods of business valuation include judging its fair market value, estimating its future growth, or weighing all of its total assets and liabilities. A family law attorney at Brandon Wong & Associates can help you get an accurate estimate of what your business is worth.

Did Your Spouse Contribute to the Business?

If your spouse helped out with your business, he or she may have a claim to some of its value. For instance, if your spouse put money into the business, it could end up becoming community property by commingling.

Not all contributions have to involve money. If your spouse assisted with daily operations, the judge might consider the business community property. To compensate your spouse for these contributions, you may have to forfeit some share of assets or pay alimony.

Meet With a San Antonio, TX Divorce Lawyer

The division of a business in a divorce should be handled with care. At Brandon Wong & Associates, we can advocate for your best interests in front of a judge to protect the future of your company. Our Bexar County, TX family law attorney will thoroughly investigate your business before proposing a solution that will serve your needs in the long term.

We are ready to hear your concerns. To schedule an initial consultation with our firm today, call our offices at 210-201-3832.