Don’t Lose Control of Your Business During a Woodlands Divorce

Getting a divorce in The Woodlands is already stressful enough for most people. When you add in a closely held business owned with other partners or a business operated entirely by a husband or wife it can get even more stressful. You probably want the business to keep operating without interference, but once a divorce case is filed you are suddenly confronted with temporary court orders and your spouse’s attorney wanting to get involved in the business to protect the legal rights of the other spouse. And if the case becomes really contentious and high conflict, you can lose complete control of your business temporarily by a court ordered appointment of a Receiver.

When The Court Can Appoint a Receiver

The Texas Family Code gives the divorce court the power to appoint a Receiver for your business or your spouse’s business (or any property owned by either of you) if the court believes doing so is necessary and equitable for the preservation and protection of the property of the parties. Some examples of when courts have found a Receiver necessary are when the business owner is not complying with temporary court orders or when the business owner is engaging in questionable financial transactions with or through the business entity. That is not an impossibly high standard to achieve like “beyond a reasonable doubt” is and does come up more often than you might think.

Is Separate Property Protected?

Another huge factor to keep in mind is that the court’s power to appoint a Receiver is not limited to community property. Recent cases have confirmed the courts interpret the operative statute as giving it the power to appoint a Receiver over any property of the husband or wife, without regard to if it is community property or separate property. The special protections that separate property have from being divided in a divorce do not apply when the issue is appointing a Receiver over that separate property.

Keep Control Over Your Business

Everything discussed above is what can happen in a litigated divorce. If you want to avoid the Court getting involved in and possibly taking control from you over your business then you may want to consider choosing the Collaborative Divorce model for your case. In a Collaborative Divorce the Court steps back and leaves it up to you and your spouse to create a mutually acceptable custom resolution to your Woodlands Divorce case. Not every case is right for the Collaborative Divorce process however, you need to honestly ask each other if you can still compromise on any level in order to achieve mutually beneficial goals for yourselves or your children. If you or your spouse are already in an “all or nothing” mode, then unfortunately you may have no choice but court litigation.

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