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The Woodlands Divorce Attorney

The Woodlands Divorce Attorney

Finding the Right Divorce Attorney

Divorce is a highly emotional and draining experience, not just on a personal level but on a financial level too. Texas is one of several community property states in America, meaning both spouses have equal ownership rights to all income, assets, and debts accumulated during their marriage. As such, the dissolution of marriage poses unique challenges for business owners. It is important to be aware that if you are a business owner in The Woodlands who is getting divorced, your business may be at risk during the property division process. Business owners getting divorced are strongly advised to hire a divorce attorney to ensure they understand their legal rights and obligations while taking the correct steps to protect their business and their finances.

At The Bihm Firm, PLLC, we understand that divorce brings serious financial implications, especially for business owners. As a result, owners of businesses large and small are encouraged to contact a family law attorney as soon as they know they may be getting a divorce. The sooner you begin developing a plan for approaching your divorce, the better.

How Do Community Property Laws Affect Business Owners in a Texas Divorce?

In Texas, the laws state that most property each spouse acquires during a marriage is shared rather than owned by each spouse. When a divorcing couple is negotiating the division of their marital estate, all community property is subject to a "just and right distribution," save for extenuating circumstances.

Under Texas law, community property includes property, assets, earned income, homes, investments, and debt. Therefore, any income generated from a business formed during the marriage may also fall under the community property category, the earnings and value of which would be split equally in a divorce.

However, if a business was formed before the marriage and was thus created using non-marital assets, that business would be considered separate property and not subject to division under community property guidelines. However, once the marriage began, it must also be determined whether both spouses contributed to the business. If the business was started before the marriage but was funded or improved upon during the marriage by both spouses, the business may be considered commingled property.

What Is Commingled Property?

Commingled property refers to assets that were acquired during a marriage but whose ownership is unclear because the assets were mixed with separate property. Commingling can happen in many ways, such as when a business owner uses marital funds to pay for business expenses or when a spouse deposits their own separate funds into a joint bank account. Situations involving commingled property can be incredibly challenging for business owners with complex financial arrangements and multiple sources of income.

Texas courts use the "tracing" method to determine the ownership of commingled property. Tracing involves identifying the source of the funds used to acquire a particular asset. If the source of the funds was community property, then the asset is community property. If the source of the funds was separate property, then the asset is separate property.

Business owners who are going through a divorce in Texas can protect their interests by working with a skilled divorce lawyer who understands the complexities of commingled property. By carefully tracing the source of funds used to acquire assets, a qualified attorney can help business owners protect their separate property and ensure a fair division of community property.

Contact a Divorce Lawyer in The Woodlands

If you are a business owner who is getting divorced, it is important to be acutely aware of how Texas community property laws may affect your business and future. These laws can be highly complex, which is why it is so critical to work with an attorney who is experienced in matters related to the division of business assets and other types of property. At The Bihm Firm, PLLC, we are well-equipped to handle all matters related to the property division in Texas. Let us work with you to determine what property is separate, community, or commingled, as well as any other matters related to your divorce that you need legal guidance with. Give us a call at 936-788-6100 or contact us online for a free consultation.

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