Divorce should not
destroy
what you spent a lifetime to build.
We represent business owners, physicians, attorneys, and executives facing divorce — protecting the business, the equity, and the assets you’ve spent a lifetime building. Houston, San Antonio, and statewide.
A dedicated High-Net-Worth Divorce team, now part of the firm.
Brooke L. Raybon
A divorce can involve a division of assets between spouses more complex than a business partnership. Divorces range from an uncontested agreement between spouses to complex asset division. Houston divorce attorney Brooke L. Raybon leads the firm’s High-Net-Worth Divorce team, handling all types of divorces in Harris County and the surrounding counties. She advises clients on the division of property, including pension plans, military pensions, 401(k)/403(b) plans, IRAs, intellectual property, real estate, mortgages, stocks, increased asset value, and business partnership interests. She is joined on these matters by Lauren A. Wilman, who brings the firm’s business-litigation and compliance background to the team, focusing on protecting business assets and ownership interests when a company is at risk in a divorce, along with other Vethan Law attorneys who support the firm’s business and family law matters.
Harris County & surrounding counties · Houston · San Antonio
Most divorces do not require a business litigator. Yours might.
If your marriage involves a closely held business, a real estate portfolio, executive compensation, professional practice ownership, or any other asset whose value will be genuinely contested, you are not facing a family law problem in the ordinary sense. You are facing a business law problem inside a family law proceeding.
The lawyers who handle the first kind of case are not, as a rule, equipped to handle the second.
Business owners already working with our business litigation and business asset protection teams bring that same institutional knowledge of their company into the divorce.
Opposing counsel calibrate their conduct to the firm they are negotiating against. Our 25-year record of business litigation, including more than 90 complex commercial, construction, and intellectual property matters presented to a jury, judge, or arbitration panel, is part of that record.
Family law representation built for the cases that matter most
Texas Family Code § 7.001 just-and-right division for estates involving business interests, real estate portfolios, executive compensation, and trust assets.
Market, income, and asset approaches with proper goodwill treatment, minority discounts, and marketability analysis.
Your inquiry is treated as confidential.
A direct conversation with one of our attorneys. No charge.* No obligation.
Structured intake covering the marital estate, business interests, and counterparties.
Negotiate where it produces the right result. Litigate where it does not.
Settlement, collaborative agreement, or trial verdict on terms that protect your enterprise.
Answers to the questions we are asked most, from Attorney Brooke L. Raybon.
How is a family-owned or closely-held business valued in a Texas divorce?
When a family-owned or closely-held business is part of the marital estate, Texas courts don’t apply a single fixed formula. Instead, the business is typically valued using one or more accepted valuation methods, such as capitalizing the business’s earnings, applying an excess-earnings analysis, or comparing it to sales of similar businesses. Courts have long approved these approaches for closely-held businesses where there’s no ready market to establish value the way there would be for, say, publicly traded stock.
Texas law draws an important line between commercial goodwill and personal goodwill. Commercial goodwill is value that belongs to the business itself — its brand, customer base, location, and reputation — all of which would carry on regardless of who’s running it. That’s community property subject to division. Personal goodwill, by contrast, is value tied to one spouse’s individual skill, reputation, and relationships, the kind of goodwill that would leave with that spouse if they walked away from the business. Under Texas Supreme Court precedent Nail v. Nail, 486 S.W.2d 761, 764 (Tex. 1972), the Court found that the accrued goodwill of a medical practice belonging to a husband who was a doctor specializing in ophthalmology, based as it was on his personal skill, experience, and reputation, was not property subject to division as part of the community estate.
Medical practices, law practices, construction companies, and access-control companies serving multifamily commercial properties are all very different professional fields and thus may each require a different valuation. This is why it is important to consult with an attorney before stipulating to an arbitrary number regarding the value of your business.
Are mineral rights and oil and gas royalties divided in a Texas divorce?
Yes, potentially. Whether a specific mineral interest is community property, and therefore subject to division by the court, or separate property, meaning your spouse is not entitled to it, depends on how and when it was acquired. Texas is a community property state, and mineral rights follow the same characterization rules as any other asset: property owned before the marriage, or acquired during the marriage by gift or inheritance, is separate property and stays with the spouse who owns it. Mineral rights acquired during the marriage with community funds, on the other hand, are community property and subject to division.
Separate property does not lose its character simply because it changes form. So long as separate property can be definitively traced and identified, it remains separate property even though it may undergo “mutations and changes.” Norris v. Vaughan, 152 Tex. 491, 496–97, 260 S.W.2d 676, 679 (1953). The Vethan Law Firm can walk through the particulars of your specific mineral rights, since small details can have a significant impact on how an asset is characterized. Information such as when the right to the interest first arose, when the lease was signed, when drilling began, when royalty checks started arriving, and your date of marriage all help determine the character of your royalties, so our firm can work to protect your assets and guard against an incorrect division. We can also help assess whether separate-property royalties have been commingled with community property, which can affect how easily that separate character can be proven.
How is executive compensation, like stock options or deferred bonuses, treated in a divorce?
Stocks
Texas Family Code Section 3.007 addresses property interests in certain employee benefits. Under Section 3.007(c), a spouse’s separate property interest in a defined contribution retirement plan, such as a 401(k), may be traced using the same tracing and characterization principles that apply to a nonretirement asset.
For employer-provided stock options and restricted stock, Section 3.007(d) sets out a formula for calculating a spouse’s separate property interest. If the option or stock was granted before the marriage but required continued employment during the marriage before it could be exercised or the restriction removed, the separate property share is a fraction: the numerator is the time between the grant date and the date of marriage, plus, if continued employment was also required after the divorce, the time between the divorce and the date the grant became exercisable, and the denominator is the full period from the grant date to the date the grant became exercisable. If the option or stock was instead granted during the marriage but required continued employment after the divorce before it became exercisable, the separate property share is the time between the divorce and the exercisable date, divided by that same full period from grant to exercisable date. Under Section 3.007(e), this calculation is performed separately for each portion of a benefit that vests on a different schedule.
Deferred Bonuses
In Texas, income earned during the marriage is community property subject to division, so a bonus received during the marriage, or one still pending at the time of divorce, will generally be treated as community property. Whether your spouse is entitled to a share of that bonus depends on the specific facts of your case and on how other assets are being negotiated in settlement or mediation.
For a deferred bonus, key factors include the terms of the employment contract, whether the bonus was earned during the marriage but paid after the divorce, and any conditions precedent to earning it, including how certain it is that the bonus will actually be collected. These details should be discussed with your attorney to assess how likely it is that a future expected bonus will be characterized as community property and subject to division. The Vethan Law Firm can review your employment contract and compensation documents to help determine how a particular deferred bonus should be characterized.
Can a prenuptial or postnuptial agreement protect my business or professional practice?
Yes. A properly drafted premarital or marital property agreement can define separate property, and set out how a business or practice interest will be treated if the marriage ends, which may help reduce the risk of costly valuation litigation if the marriage later ends in divorce. Enforceability of a prenuptial or postnuptial agreement is of the utmost importance. You do not want to find yourself in a divorce proceeding having previously signed a prenuptial agreement, only to discover that it does not satisfy the requirements of the Texas Family Code and is therefore unenforceable, leaving you in litigation as though you had never entered into one. The Vethan Law Firm can help draft your prenuptial, postnuptial, or cohabitation agreement to reflect how you want your assets protected, and can advise you on the requirements for enforceability.
My spouse and I are co-owners of a business. How is our ownership interest characterized and divided in a divorce?
The type of business you and your spouse co-own is likely the first question an attorney will ask in response to this. For example, a limited liability company is a separate legal entity, and property owned by an LLC is neither the community property nor the separate property of its members. Tex. Bus. Orgs. Code Ann. § 101.106(b). However, distributions from the operation of an LLC during the marriage are considered community property, even when the membership interest in the company is owned by one spouse as separate property. Mason v. Mason, No. 03-17-00546-CV, 2019 Tex. App. LEXIS 3580, at *1 (Tex. App. May 3, 2019).
How you and your spouse want to divide a business you co-own, whether you want to continue as business partners after the divorce, and whether one or both of you want to keep the business and eliminate the other spouse’s ownership interest and future income, are all questions your attorney needs answered to help determine the best strategy for reaching your goals. Partnership agreements, shareholder agreements, and LLC operating agreements often include transfer restrictions, buy-sell provisions, or rights of first refusal that limit what a court can actually order, especially when other partners or shareholders who are not part of the divorce are involved. Sorting out how those provisions interact with community property division is where family law and business litigation experience need to work together.
A fiduciary duty exists between spouses with respect to the community property each controls. Waste occurs when one spouse, dishonestly or with the intent to deceive, deprives the community estate of assets to the detriment of the other spouse. A presumption of constructive fraud, sometimes called waste, arises when one spouse disposes of the other spouse’s interest in community property without that spouse’s knowledge or consent. Once a trial court finds constructive fraud, it must perform two calculations: first, the value by which the community estate was depleted as a result of the fraud, and second, the value of the “reconstituted estate,” meaning the total value the community estate would have had if the fraud had not occurred. Tex. Fam. Code § 7.009(a); Mason v. Mason, No. 03-17-00546-CV, 2019 Tex. App. LEXIS 3580 (Tex. App. May 3, 2019).
In evaluating a related claim for reimbursement, a trial court considers the facts and circumstances of the case and determines what is just, fair, and equitable. Legitimate business expenses, personal expenses, and any expenditures your spouse claims were improper should all be discussed with your attorney, both to help defend against a claim that you committed fraud on the community and to help establish such a claim if your spouse is the one who diverted assets.
The Vethan Law Firm’s business litigation team, with experience in partnership and shareholder disputes, business dissolution, and business succession planning, works directly alongside our family law attorneys on situations like this, so both the divorce and the underlying business structure can be addressed together.
My spouse said he/she is going to file for divorce. What should I expect?
The spouse who files for divorce is the “Petitioner” in a family law proceeding. The original petition for divorce is the document that begins the divorce proceeding. Once the petition is filed, you will likely be served with it. Your spouse cannot serve you the document themselves. Once served, you will have until the Monday following the 20th day after you were served to file an answer. This means you will be the “Respondent” in the lawsuit.
My spouse believes hiring an attorney is pointless and wants to proceed with the divorce as pro se litigants. What is a pro se litigant, and is this a good idea?
Being a pro se litigant means that you and/or your spouse are participating in the divorce without an attorney. The advice of a seasoned divorce attorney is always recommended. Divorces are not always as easy as dividing property. Many courts have specific rules and steps to take in order for a judge to sign off on the final divorce decree. The language of the divorce decree is crucial, as it is the mechanism that sets out specific court orders on how the property is to be divided and how conservatorship issues are to be handled. If a spouse fails to comply with the court order, the way to ensure compliance is to file an enforcement action. For a court order to be enforceable, the language in the final divorce decree must be specific, or the enforcement will be denied. As such, it is not a good idea to proceed in a divorce proceeding as a pro se litigant.
My spouse's attorney reached out to me and wants me to sign a waiver of service along with a final divorce decree. Should I sign these documents?
No, you should not sign a waiver of service or a final divorce decree without consulting with an attorney. A waiver of service tells the court that you are now participating in the divorce and do not need to be personally served. Language in the waiver can put you at risk of not receiving necessary information regarding your hearing and can subject you to a default hearing if it is not drafted correctly. Many pro se litigants sign a waiver of service without fully understanding how to receive and/or participate in the court hearing correctly. You do not want your spouse to proceed with a default hearing. A default hearing or trial would be harmful, as it allows your spouse to ask the judge for the relief they requested without your attendance and/or an attorney objecting to or admitting evidence on your behalf.
If you retain an attorney, your spouse’s attorney cannot contact you directly.
I was served with an original petition for divorce, and my spouse's attorney sent me a final decree of divorce and told me to sign it, as it is a fair deal. Should I sign the decree?
No, you should not sign the decree without consulting with an attorney. An attorney may not represent both a husband and a wife in a divorce proceeding, as it is a conflict of interest. This means that if your spouse has an attorney, that attorney’s job is to protect your spouse’s best interests — not necessarily yours. Pro se litigants often mistakenly believe the divorce decree is fair and sign off on the final decree of divorce in hopes of “getting the case over with” or “saving money.” Many times, they later find out that they did not receive proper discovery responses from their spouse and did not receive a true, fair, and equitable division of the estate, and that their spouse walked away with a chunk of the community estate that could have been awarded to them. You do not want to be in a position where you have a court order signed by the judge that you must comply with, only to later discover that you lost out on a portion of the community estate to which you were entitled.
What is community property vs. separate property?
In Texas, it is presumed that all property is “community property” and is therefore subject to division by the judge. Community property is any property that is not separate property, including all earnings acquired by either spouse during the marriage and anything obtained with those earnings. Generally, separate property includes: gifts and inheritances given to a spouse; personal injury awards received by that spouse (except for any award for loss of earnings); proceeds from a pension that vested before the marriage; property purchased with a spouse’s separate funds, which remains that spouse’s separate property; and a business owned by one spouse before the marriage, which remains that spouse’s separate property. A spouse is not entitled to the other spouse’s separate property, nor can a judge award a spouse a portion of the other spouse’s separate property.
I bought my home before marriage. Can my spouse be awarded the home in a divorce?
This is a common situation where community property gets commingled with separate property if community funds were used to pay the mortgage after the marriage. If this applies to you, it is best to seek advice from a divorce attorney who can help you determine what portion is separate property versus community property. If a spouse has a separate property claim, it is that spouse’s burden to prove the asset is their separate property. If a spouse fails to prove by a preponderance of the evidence that an asset is their separate property, then that asset becomes community property and is subject to division by a judge.
Will my spouse get alimony/spousal support?
Whether a spouse is awarded spousal support depends on multiple factors, including the length of the marriage, the spouse’s ability to obtain employment, whether the spouse has a disability, and whether the spouse has the training or certifications needed to obtain employment to support themselves. The amount of spousal support and the duration of one spouse’s obligation to pay it are both dependent on these same factors.
How will debts be divided in our divorce?
It is not unusual for a marital estate to carry a heavy debt load. Ensuring debt is properly divided in a divorce decree is just as important as properly dividing assets. Common debts include mortgages, car notes, and credit cards. Generally, creditors are not parties to a divorce, so any specific agreements made with creditors should be discussed with your attorney during negotiations. You do not want to be in a situation where your spouse is awarded an asset, only to find out that you are still on the hook for the debt associated with that asset. Even if your final divorce decree states that your spouse is to pay a debt in your name, if your spouse defaults on the payment, it will negatively impact your credit. If you agree to give your spouse the marital residence and you are both on the mortgage, you should consult with an attorney to advocate for steps to get the debt removed from your name, if possible, or to include provisions ensuring you are protected if your spouse’s post-divorce actions affect your credit.
My spouse and I never had a wedding, but I was just served with an original petition for divorce stating that we are common-law married. Is this possible?
Yes, it is possible. A ceremonial marriage is the classic marriage most people think of — e.g., obtaining a marriage license, having a wedding, and exchanging vows in front of a judge. Texas also recognizes common-law marriages. Whether you are common-law married depends on whether you meet the elements required under the Texas Family Code. These are fact-intensive cases, as the elements must be proved with evidence. Common facts considered in these cases include: whether you and the potential spouse agreed to be married; whether you cohabitated, and if so, whether that cohabitation occurred before or after the agreement to be married; whether you told friends, family, co-workers, or members of the community that you were married; and whether you filed joint tax returns as a married couple. If the elements are met and you are common-law married, then you must proceed with a divorce the same way as with a ceremonial marriage — there is no such thing as a common-law divorce. Thus, it is important to consult with an attorney before leaving a residence you share with someone who may be your spouse via a common-law marriage, so you can determine whether you need to file for divorce first. If you do not get divorced properly, your spouse can file for divorce down the road, and any property you acquire after you cease living together is still considered community property and subject to division in that divorce.
I attended mediation without an attorney and signed a mediated settlement agreement. Can I revoke the agreements made in the mediated settlement agreement?
Generally, no. A mediated settlement agreement (“MSA”) is binding and irrevocable. These are signed when the parties reach an agreement regarding property division and conservatorship issues. Mediation is a type of alternative dispute resolution and is required in most counties in Texas before a temporary orders hearing and/or a final trial. If no agreement is reached, then the judge makes these decisions at a temporary orders hearing or a final trial. If the MSA is signed by all parties and attorneys, it is binding and irrevocable, and the final decree will be drafted and entered pursuant to the terms of the mediated settlement agreement (a.k.a. “no takebacks”). Thus, it is important that you consult with or retain an attorney before you attend mediation, because if you wait until after an MSA is signed, it may be too late to change the terms of the agreement. You do not want to consult with an attorney afterward and realize you could have had a much better deal.
My spouse wants full custody of the children. Will he or she get it? What is conservatorship?
In Texas, conservatorship is generally divided into three categories: (1) rights and duties of the child; (2) possession of and access to the child; and (3) child support. The child’s best interest is the central focus in a case involving conservatorship. Generally, rights and duties pertain to how decisions are to be made regarding the child(ren). Some of the main rights and duties include: the right to determine the residence of the child, the right to consent to invasive medical/dental procedures for the child, the right to consent to psychiatric/psychological treatment for the child, the right to enroll the child in school, and the right to apply for, renew, or maintain passport(s) for the child(ren). Whether these decisions are to be made jointly (both parents have to agree), independently (either parent can make a decision without the agreement of the other), or exclusively (only one parent gets to make the decision) is a fact-intensive inquiry. Further, a decision being made jointly may be beneficial in one area but detrimental in another. It is important to consult with an attorney to determine how these decisions are made and drafted correctly in a final divorce decree, as overlooking such details can negatively impact the child(ren) and/or subject a parent to an enforcement action.
I see my child 50% of the time. Do I have to pay child support?
In Texas, it is presumed to be in the best interest of the child that a parent be awarded a standard possession order. It is also presumed that the parent awarded the standard possession order be ordered to pay guideline child support. To deviate from these presumptions, you should consult with an attorney to discuss whether your living situation with your children can be accurately proven to rebut the presumption that you or the other parent should be awarded a standard possession order. If parents truly have a 50/50 possession schedule that they abided by before filing for divorce or a suit affecting the parent-child relationship, they are in a better position to have the judge grant a request that a parent’s child support obligation be reduced and/or that no child support be ordered at all.
Child support is calculated using the child support guidelines under the Texas Family Code. The child’s needs must be met. If there is a large earning disparity between the parties along with a 50/50 possession schedule, a judge may order the higher-earning parent to pay reduced or full child support. It is important to retain an attorney to advocate for you and help prepare your case for trial.
Any information contained on this page is intended for informational purposes and is not legal advice. Consult with an attorney for advice on a legal matter.
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1300 McGowen Street
Houston, Texas 77004
(888) 666-5908
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San Antonio, Texas 78230
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Prior results do not guarantee a similar outcome. Each matter is different and is decided on its own facts and law. Nothing on this page is a guarantee, warranty, or prediction regarding the outcome of any legal matter. This page is attorney advertising. Charles M.R. Vethan, managing attorney, and Brooke L. Raybon, The Vethan Law Firm, P.C., Houston, Texas, are responsible for the content of this page.