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Small business owners must navigate high asset divorces

Given the relatively stable economic environment of Texas, it's no surprise that many Texans try their hand at starting and running a small business. As a result, many divorces in the state involve one or both parties as business owners.

Any high asset divorce can entail complex property division, but small business owners are particularly susceptible to complicated proceedings. However, if they take a proactive approach to gathering knowledge before heading to court, they can minimize the stresses of dividing business elements during divorce.

The first step, of course, in any marital dissolution is obtaining professional assistance in sorting-through legal and financial details. If one or both parties in a divorce runs a small business, that economic entity will need a thorough valuation.

A financial expert - sometimes two, one for each party - will review important business documents, such as records of expenses and other accounting materials.

Original documents often come into play in court, such as prenuptial or postnuptial agreements and even business partnership agreements. Judges will review this paperwork to get a sense of the initial intention of the parties involved.

In some worst-case scenarios, business owners must sell their operations in order to fulfill financial obligations to a former spouse following a divorce. However, if owners seek a structured settlement of payments, they may be able to avoid having to part with their business.

Some of the most recent information from the Small Business Administration paints an optimistic picture of small business activity in Texas. In 2009, these types of employers comprised a large percentage of total employers in the state, employing more than four million workers.

In a recent poll through Thumbtack.com and the Ewing Marion Kauffman Foundation, Texas ranked among the top states for starting a small business.

Source: Fox Business News, "How to minimize the impact of divorce on your small business," Jennifer A. Brandt, Aug. 2, 2012

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Attorney Christine K. Lincoln

Christine K. Lincoln offers sound counsel and legal services to protect clients and their families facing divorce and other family disputes.

She will take the time to understand your individual needs and develop a comprehensive solution to protect your rights and interests.

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