David built his business from a dusty one-room office behind a gas station.

He was 26, broke, and newly married when he launched a heating and air conditioning company with nothing but a loan from his uncle and a rusted-out van. Fifteen years later, that gamble had grown into a company with seven trucks, twelve employees, and contracts all over North Texas.

Then his marriage crumbled.

David sat in our office, shoulders tense. “If she gets half of everything, what happens to the business? Am I supposed to sell it and start over?”

This fear is common—and valid. But the answer is not that simple.

Understanding What the Court Can and Cannot Do

Let us start with the basics: Texas is a community property state.

That means, generally, everything acquired during the marriage—including a business—is subject to division in divorce under Texas Family Code § 7.001. The Court has broad discretion to divide the estate in a “just and right” manner.

But that does not mean the business is cut in half like a pie.

Here is the key: Courts do not divide assets physically. They divide value.

The goal is to find a way to account for the business’s worth—and offset it, so that one spouse keeps the business and the other receives something of roughly equal value.

This is where good strategy (and good lawyering) comes in.

Is the Business Community or Separate Property?

The first step is characterization.

If David had started the company before the marriage, there might be a separate property claim. But even then, the increase in value during the marriage may be subject to division. On the other hand, if the business was started during the marriage, it is likely community property.

This is why detailed records—bank statements, partnership agreements, even old tax returns—matter. Tracing funds and proving origin can affect how much is actually up for division.

In Tarrant County, Courts look closely at:

When the business was formed
How it was capitalized
Whether the spouse contributed labor or funds
Whether community time or assets were used to grow it

David’s Situation: Keep the Business, Keep the Peace

In David’s case, the business was clearly started during the marriage. His wife had never worked in it, but she had supported the household while he reinvested profits for years.

We brought in a forensic CPA to conduct a business valuation. Not just the equipment—but goodwill, client lists, and earnings. The number came back: $800,000.

David was stunned. “But I do not have $800,000 sitting around.”

He did not have to.

We negotiated a division where David kept the business entirely, and his wife received the family home and some retirement. David considered a structured payout over time, but elected to let her have the before tax retirement dollars.

Why did it work? Because we told the right story.

We showed:

The business depended on David personally (making it hard to split or sell).
Selling the business would destroy value for both parties.
The only way to preserve the marital estate’s value was to let David continue to operate and grow it.

And just as important: we presented alternatives. Real numbers. Real options. Not drama.

What Can You Do If You Own a Business and Face Divorce?

1. Do Not Try to Hide It

Trying to move money around, undervalue the business, or “shelve” accounts is a disaster in the making. Courts can impose penalties, attorneys’ fees, and even award the entire business to the other spouse in extreme cases under Texas Family Code § 7.009 (fraud on the community).

2. Get a Valuation Early

The sooner you know what the business is worth, the better you can plan. This means hiring a neutral expert or preparing for a rebuttal valuation. In Tarrant County, Judges often look to experts who are certified in valuation—not just a regular CPA.

3. Do Not Panic About Splitting Ownership

Courts almost never force spouses to be “co-owners” post-divorce—especially if the business is service-based or dependent on one spouse’s work. The typical solution is one spouse keeps the business, and the other receives a value offset (like equity, cash, or assets).

4. Understand What Is on the Table

Business value includes:

Tangible assets (vehicles, equipment, real estate)
Accounts receivable
Goodwill (especially if the business has a brand beyond just the owner)

It does not include personal reputation alone. So, a solo practitioner without transferrable value might not face as high a valuation as a scalable business with recurring revenue.

5. Use Creative Settlement Structures

If you cannot afford a full buyout up front, consider:

Offset with other community assets (real property, retirement, brokerage accounts)
Installment payouts
Adjusted child support or spousal maintenance terms (if appropriate)

What About a Prenup or Postnup?

If you are a business owner, you should seriously consider a prenuptial or postnuptial agreement—especially if your company predates your marriage or is growing rapidly.

These contracts can:

Establish the business as separate property
Define future earnings and appreciation
Settle how ownership is handled in divorce
They must be drafted properly under Texas Family Code Chapter 4, and both parties must fully disclose finances and sign voluntarily. Courts in Tarrant County generally uphold these agreements if they meet legal standards.

Even if you are already married, a postnup can offer similar protection.

Checklist for Business Owners Facing Divorce

Get a business valuation
Review all business records from the start of the marriage
Hire a Board Certified family law attorney familiar with business issues
Avoid moving money or changing business structure
Consider forensic accounting support
Propose value-based settlements—not ownership splits
Explore structured payouts or asset offsets
Avoid emotion-driven decisions—especially during negotiations
Maintain business continuity and avoid disruption
Communicate clearly with your attorney about long-term goals