Business Valuation
What a closely held company is worth, and who decides.
Characterization comes before division
A Texas court divides community property. It has no authority to divest a spouse of separate property. So the threshold question on every asset is what it is — community (Tex. Fam. Code § 3.002) or separate (Tex. Fam. Code § 3.001).
The presumption favors community, and it is rebuttable only by clear and convincing evidence. That standard is why characterization is a documents case. The house you bought before the marriage is separate; the community's payments against its mortgage during the marriage may create a reimbursement claim. The brokerage account you brought in is separate until deposits and withdrawals mix it so thoroughly that tracing fails, at which point the whole account is treated as community.
How This Plays Out in Practice
What a closely held company is worth, and who decides. The specifics turn on facts — the length of the marriage, what is in the estate, whether children are involved, and how much the two of you still agree on. What does not change is the framework: Texas courts apply the Family Code, and the outcome follows from how your facts meet it.
Lisa G. Garza handles these matters from the firm's Dallas and McKinney offices, for families throughout North Texas.
Questions
Is Texas a 50/50 state?
No. Texas is a community property state, which is not the same thing as an equal-division state. Texas Family Code § 7.001 directs the court to divide the community estate in a manner that is just and right, having due regard for the rights of each party and any children. Disproportionate divisions are common and legal.
What is separate property in Texas?
Under Texas Family Code § 3.001, separate property is property owned or claimed by a spouse before marriage, property acquired during marriage by gift, devise or descent, and recovery for personal injuries sustained during marriage except for lost earning capacity. A court cannot divest a spouse of separate property in a divorce.
How do I prove an asset is my separate property?
By tracing it back to its separate source with documentary evidence, to a clear and convincing standard. Texas Family Code § 3.003 presumes property possessed by either spouse during or on dissolution of marriage is community property. An asset kept in its own account is straightforward to trace; one commingled with community funds over years may not be traceable at all, in which case it is treated as community.
Is my spouse's retirement account part of the divorce?
The portion earned during the marriage is community property even if only one spouse's name is on the account. Dividing a qualified retirement plan generally requires a qualified domestic relations order entered along with the decree. Without that separate order, the plan administrator will not pay a share to the other spouse.