Divorce And Your Business: Who Gets What
In today’s unpredictable economy there has been a continuing growth of small businesses and a substantial decrease of existing established businesses in Texas. In the regrettable instance of “Divorce” how may the “Family Business” be divided between a dissolving couple to reach a fair and reasonable result for both parties?
In such a situation, an experienced Family Law Attorney with the aid of economic experts becomes critical in establishing a fair and equitable price on the business, consulting the client on their rights relative to the business, helping with negotiations for a business entity to be sold, transferred, or appraised, and making sure the client’s rights are protected in the transaction.
The most important fact to establish is a credible determination of the true fair market value of a business and how the business or the business assets are to be divided between the spouses in the divorce.
The dividable interest is determined by the fair market value of the business. This value is the price a willing buyer would pay and a willing seller would give in a purchase with both buyer and seller having reasonable knowledge of the relevant facts of the business and neither being under pressure to buy or sell the business.
During a Divorce, the concept of a credible hypothetical buyer and seller may be determative and very complicated. Going through a divorce is difficult enough, but fairly determining the true value of the business in the process can be complicated and sometimes expensive. There are always two different ideas in every divorce and the family business will bring out the some very serious opinions of just what is the “fair market value”! Ideas may range from too high in today’s economy to too low base on emotional attachments, complicated further by feelings as to possible other family members who own or claim parts of the business. The value placed on proposed purchases that are not part of an arm’s length transaction may not be relevant to the correct fair market value.
To help determine the fair market value and complete the transaction fairly for both parties the family law attorney must be able to obtain and review all business and financial records, financial statements and tax returns, and any other pertinent information for the preceding 5-7 years. Often an independent business appraiser or CPA will be retained to help in determining a credible and correct valuation of the business that a Judge or Jury will respect.
Recourse to Interference with Child Custody
In the State of Texas, interference with child custody is punishable both civilly and criminally.
According to the Texas Family Code, a person who takes, retains, or conceals the whereabouts of a child at a time when another person is entitled to possession or access of the child may be liable for civil damages to that person.
The damages that may be recovered are expenses incurred while locating the child, securing the possession of the child, and enforcing the order, including attorneys fees. One may also be entitled to mental suffering and anguish incurred due to the interference and violation of the order. One may also be entitled to exemplary (punitive) damages if the violating party acts with malice, or an intent to harm the other party.
A violator can also be held criminally liable for interfering with child custody. According to the Texas Penal Code, a person commits an offense if they take or retain a child younger than 18 years of age, and:
- The person knows their taking or retention violates the express terms of a judgment or order, including a temporary order, of a court disposing of the child’s custody; or
- when the person has not been awarded custody of the child by a court of competent jurisdiction, knows that a suit for divorce or a civil suit or application for habeas corpus to dispose of the child’s custody has been filed, and takes the child out of the geographic area of the counties composing the judicial district if the court is a district court or the county if the court is a statutory county court, without the permission of the court and with the intent to deprive the court of authority over the child; or
- outside of the United States with the intent to deprive a person entitled to possession of or access to the child of that possession or access and without the permission of that person.
A noncustodial parent commits an offense if, with the intent to interfere with the lawful custody of a child younger than 18 years, the noncustodial parent knowingly entices or persuades the child to leave the custody of the custodial parent, guardian, or person standing in the stead of the custodial parent or guardian of the child. Such an offense is a state jail felony which, if prosecuted, can lead to fines of up to $10,000.00 and anywhere from 180 days to two years in state jail.
Nacol Law Firm P.C. – Fathers Rights Attorneys – Dallas TX
Disclaimer: The information provided in this article is in no way intended to constitute legal advice. The information provided is merely an overview of the relevant law. Do not act on this information. Always consult an attorney for legal advice.
NACOL LAW FIRM P.C.
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Attorney Mark A. Nacol is board certified in Civil Trial Law by the Texas Board of Legal Specialization