If you and your spouse are getting divorced, there is a good chance that your business will be marital property. In other words, your company is likely going to be an asset that the court will want to divide between the two of you — even if it’s solely your business and not your spouse’s. For many business owners, this is a nail biter of a situation. Naturally, you do not want to split the value of something you created and worked hard to grow on your own. But there are a few ways you can position yourself to protect your business during a final divorce agreement.
Understanding Separate Property
Each state has its own criteria for separate (or individual) property, meaning assets that belong to one spouse and not another during divorce. Typically, assets that one spouse acquired before marriage are separate from the pool of marital property to be divided. However, if the value of that asset increased during the time the couple was married, that additional value will likely be marital property. So, if you started your business before marriage, there is a good chance it will be considered separate property, but if your business grew while you were married, the value of that growth could be marital property.
During Divorce, Negotiate to Keep Your Business
If the court deems your business or some of its value to be marital property, you can still try to keep it entirely in your possession after divorce. That’s where good attorney negotiation comes into play. If your business is more important to you than, say, the share of your house’s value, you could try to negotiate keeping your business as your own and trading that value for something your spouse would rather have. You may consult family lawyers from law firms like Kania Law to ensure that you get the outcome you deserve.
“Whether spouses are working to negotiate outside of court or need to litigate the divorce, their attorneys can work to divide the assets in a way that satisfies both parties in the end,” said Philadelphia divorce lawyer Thomas J. Petrelli, Jr. “In the legal system, it’s all about finding a division that makes sense. If that means one spouse gets the business in full and the other spouse gets the car, or the vacation home, or another asset with equal value, that trade-off can be worked out in the divorce agreement.”
Before Marriage, Consider a Prenuptial Agreement
If you happen to be reading this article and you are not married yet, consider a prenuptial agreement before you tie the knot. Of course, it isn’t the most romantic topic to bring up to your fiancé, but it is a helpful piece of paper to have to avoid dealing with the issues above.
Instead of looking at a prenuptial agreement as a bad omen, consider it another way. You have life insurance, health insurance, and car insurance to protect against the unexpected; a prenup is like an insurance policy to protect your assets. And if you have a business, that legally binding document could state that the company is separate property and would still belong to you if you dissolve your marriage down the road.
When you’ve decided to move forward with divorce, the best thing to do is hire an attorney with experience in resolving cases involving a business. You’ll discuss your goals and the obstacles you may face, and you should feel more confident that you will be able to keep the business you built at the end of the divorce process.
What You Need to Consider When Evaluating Child Support
If you’re getting divorced and you have kids, child support is likely on your mind. This agreement provides that one parent will pay the other after divorce in order to properly support their minor children’s needs. Child support covers expenses like food, clothing, medical and dental expenses, education costs, and more. However, it may be unclear which spouse will pay child support, and how much they’ll pay, especially if you’re just starting out with your divorce. Here are a few things to know.
Child Support Is the Court’s Decision
The first thing to understand about child support is that it’s not up to you and your soon-to-be ex to decide who pays what to whom. Rather, the court will evaluate your children’s needs as well as your financial and work information to determine how much support is needed and who must provide it.
Still, spouses do not have to wonder about the outcome of child support until the end of the divorce process. “While divorcing spouses do not have much control over the court’s decision regarding child support, they do not have to be in the dark about what to expect,” said Philadelphia divorce lawyer Thomas J. Petrelli, Jr. “Family law attorneys can calculate a decent estimate ahead of time, so you’ll know what you will likely see in the agreement.”
To get this estimate, many family law firms use software that applies formulas based on the normal costs for a family to raise children today. While it’s impossible to predict the court’s final support order with absolute certainty, this ballpark figure can help put parents’ minds at ease in the meantime.
Factors in Determining Child Support
The equation used to determine support will factor in a variety of details that are unique to each family, such as: the number of minor children and their needs, each parent’s income and ability to pay for the children’s needs, and the family’s standard of living before divorce. At the end of the day, the goal is to ensure the children have the financial help they need to live their lives securely, as if the divorce never happened.
Custody and Child Support
As a rule of thumb, the parent who will have more physical custody of the children will likely be the one to receive child support, as their provision of custody serves as their version of support. However, even if the parents have equal shared custody, one parent will owe some amount of child support to the other.
If Life Changes, Parents Can Ask the Court for an Order Modification
When circumstances change — such as a pay raise or loss of income — one parent can submit to the court a request to amend the original child support order. It’s important to speak with a family law attorney about requesting a modification, and to never try to stray from what’s in the agreement before the court modifies it.
“Child support is going to be a factor in any divorce agreement that involves kids,” Petrelli said. “The best thing to do is to speak with an experienced lawyer early on to relieve the stress of wondering what will happen.”
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