Divorce can factor into an individual’s estate plan, retirement plans, or business interests. Here are a few things to keep in mind if you are considering divorce.

Divorce and Wills

During the divorce process, the last thing on anyone’s mind is what would happen if they unexpectedly pass away or become seriously ill. Most people are surprised to learn that the soon-to-be ex-spouse retains legal power to make medical decisions for you until the divorce is finalized. Your parents or siblings would have to petition a court to obtain those legal rights.

Likewise, if you die before your divorce is finalized, the divorce action will be dismissed and the executor determinations of your will move in place. In that scenario, now your surviving spouse has control over your estate and assets. Revising your will immediately subsequent a divorce is vital.

Divorce and Business

Another common mistake is assuming any business interest or asset a person has built on their own while married is theirs solely when they divorce. Texas is a community property state meaning that under the law, each party owns half the assets accumulated during the marriage. This means your spouse owns 50 percent of your business if you used money accrued during the life of the marriage to start the business.

Unless there are originating documents or a prenuptial agreement in place, a financial interest in a business is inheritable by a surviving spouse. Consider two individuals who create a partnership and split ownership in half. Each ownership piece is then split in half again between the partner and his or her spouse. Should a partner die (without the proper agreements in place on how to deal with such an event), the surviving spouse would have decision-making authority on all financial matters for that business.

What To Do

At Weldy Law, we can draft business succession plans to address this scenario as well as many others. Our job is to consider all the possibilities and make sure the legacy and financial integrity of our clients remain intact. Death and divorce create difficulties, but we are committed to finding satisfactory solutions to these problems.

Have more questions about how a divorce can impact your estate plan or business? Give us a call at 806-928-2087 and let’s set up a free initial phone consultation to discuss your concerns or needs.

 

The above blog is for informational purposes only and is not legal advice nor does any information or communication with the website create an attorney-client relationship.