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Can you claim your spouse’s business is community property?

When two people decide their marriage isn’t working anymore, the Texas family courts often have to set the terms. In Texas, the courts typically treat property obtained during the marriage like community property that both spouses have an ownership interest in.

If you have spent much of your marriage taking care of the family while your spouse ran a business or if you were the primary wage-earner for several years while your spouse started a business, you may feel like you don’t have much to show for your contributions to the marriage. If the business is only in your spouse’s name, do you have any right to lay claim to it during a divorce?

Businesses almost always include some community property

When your spouse started the business and how they funded its ongoing operations will influence how the courts view the business when you divorce. The more marital or community property that goes into the maintenance of the business and the more you contributed through financial or practical support, the greater your claim has value.

For example, if you worked full-time while your spouse tried to get the business up and running, your income undoubtedly contributed to their ability to move their plan forward. If you stayed home with the kids, your unpaid labor around the house will likely have drastically contributed to their ability to remain focused on the business, as startups typically require a lot of time and mental effort.

The more financial and practical contributions you made to the business, such as doing unpaid work as a receptionist, the easier it will be for you to establish your right to at least some of the business’s value.

Make sure the valuation of the business is appropriate

Successful businesses have many moving parts, and that makes them a perfect way for an unscrupulous person to obfuscate their financial circumstances. Your spouse might try to make it look like the business doesn’t generate revenue or has a lower value than it truly does in order to deprive you of your fair share of the business.

Talking with an attorney about the company and asking for their help in reviewing the valuation of the business or establishing your case for the business as community property can be an important first step when divorcing.