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Germantown Family Law Blog

Protecting a small business during marital asset distribution

When a Tennessee family or couple or just one member of the family unit owns a small business, a subsequent divorce can become very complex. This is because there is now an asset that may be subject to distribution along with the other assets of the marriage.

What business-type assets owned by a party that can fall within the confines of business ownership subject to distribution are many, including the following:

  • Corporations
  • Partnerships
  • Professional practices
  • Limited Liability Corporations
  • Sole Proprietorships
  • Franchise or agency agreements

Who wins in a divorce?

We are sometimes asked, “Who usually wins in a divorce case?” The feeling we get is that the winner is whichever side has the most aggressive lawyer, in the shiniest suit.

Sorry to say this, but in our opinion divorce isn’t something people “win.” For most, it is the biggest failure they ever experience in life – whether they get the house or not. Having your life assets divided down the middle, and your children having to accommodate this rupture in their world, is not something to kick up your heels over.

Reviewing the factors considered when awarding alimony

Many in Germantown may assume that when a couple chooses to get a divorce, one side will automatically be awarded alimony. This assumption likely arises due to a number of misconceptions, chief among them being that whomever was the primary provider in a relationship is obligated to support the other. Most might assume that to the husband. Statistics seem to back up that belief, with the Huffington Post reporting that 380,000 women in the U.S. receive some form of spousal support as opposed to only 12,000 men. Yet that is not always the case. 

To understand why the court chooses to award alimony, one must comprehend its purpose. Alimony is only meant to help one whose decisions to contribute to marriage put him or her at an economic disadvantage should his or her union end re-establish him or herself financially. Thus, the court considers a number of factors before choosing to award such support. According to Section 36-5-121(i) of Tennessee's Code regarding domestic relations, these include: 

  • The earning capacity of each party involved, included each's individual financial obligations and needs
  • The financial resources available to each party, including each's separate assets, awarded marital property, and income earned from pensions, retirement or profit sharing plans as well as other sources
  • Each parties level of education (or the time required for one side to achieve an education the would allow him or her to secure gainful employment)
  • How long the marriage lasted
  • The current age, physical condition and mental status of each party 
  • Whether or not one has obligations inside the home (such as raising children). 

Former couple feuding over comments and Instagram posts

Those who are going through divorce proceedings in Germantown are often encouraged to be careful of what they say about their soon-to-be ex-spouses as well as what they share through social media. Any flippant, hurtful or obscene comments or content may end coming back to harm them as their cases are being determined. It might be difficult to ask someone to put the strong negative emotions they feel towards their former spouses aside for what could be an extended period of time, yet in the end, restraint may help avoid what may already be an ugly situation from getting any messier. 

Messy may be the ideal word to describe the proceedings that have been going on currently between a man and woman in California. While the couple never actually married, they did have a child together. Currently, the man (a former reality television star) pays $20,000 a month in child support. Media outlets covering the case claim that sources say the man claims the money goes to pay for the nannies who watch the child while the mother goes out to party. The woman, through her attorney, fired back saying that he was trying to defame her. Later, the man posted explicit photos of the woman on his Instagram account, which he later removed as such content could have gotten him in trouble under the state law that prohibits revenge porn. In response, the woman took out a restraining order against him, citing the posted photos and claims that he had assaulted her. 

Speaking to your children about your divorce

If you are getting ready to go through a high asset divorce, you might be facing various different challenges, from uncertainty about the way that the court will split up your marital property to concerns about child support or some other issue. However, if you have children, you might also be worried about how your decision to end your marriage or the inevitability that your marriage will come to end could affect them. Divorce can certainly have an impact on children, but there are steps you can take to potentially reduce any repercussions, such as carefully talking to your kids.

If you are unsure of how to approach this topic, it may be helpful to try to view divorce or whichever family law issue you are dealing with from your child's perspective. If they have any questions, or if you anticipate any areas of uncertainty, it could be very beneficial to carefully address the matter and do what you can to let your child know that they will still be loved. Divorce can create emotional and financial struggles for parents, but they can also lead to certain difficulties for children when parents neglect to prepare appropriately.

Debts and divorce

Debt is something that countless people in Germantown deal with, and if you are like most of them, it can occasionally lead to some marital strife. Many of those that have come to us here at The Thomas Family Law Firm, PLC in the past have seen such strife impact their marriages to the point of seeking divorce. If that accurately describes your situation, then you may view divorce as a way to get out from under the debts that your soon-to-be ex-spouse has accrued. Reality, however, may not match your expectations. 

Just like many of your assets, debts are considered to be marital property, and thus subject to property division in your divorce. That may leave you shouldering a greater share of your marital debt than you believe you are directly responsible for. Yet the court does not simply divide all debts incurred during your marriage equally down the middle. It does consider each of your individual roles in assuming it. Some of the factors it considers include: 

  • What was the purpose in assuming the debt? 
  • Which of you incurred it? 
  • Which of you benefitted the most from it? 
  • Which one of you is best able to repay it? 

QDRO: Important wealth paperwork in divorce

There are many elements to a divorce beyond the end of marriage. Divorce can affect your retirement savings, child custody and property. Each area requires its own consideration and paperwork as the divorce is finalized. Further, these documents are relevant to spelling out the larger agreement between you and your ex.

Getting this paperwork right can help avoid both financial and emotional turmoil later in life. Many of the disputes you could face with your ex as life changes can be settled by renegotiating an agreement. However, some government agencies dictate the paperwork required in the process, and divorcees who do not take this into consideration could find themselves facing additional scrutiny at tax time.

When a postnuptial agreement may be needed

In recent years, many people in Tennessee have come to embrace the benefits of prenuptial agreements more than they did several decades ago. No longer are these marital contracts thought of as only needed by the rich and famous. Everyday couples now realize they can get valuable protections with these documents. For those couples that did not get a prenup before they got married, there is still the chance to be protected by creating a postnuptial agreement. 

According to Today, one of the most common situations that may necessitate a postnup is the decision by one person to quit working to stay home and raise the family's children. This may be a mom or a dad and the challenges faced by either are the same. The years spent raising a family are often some of the most critical ones for building a career and increasing a person's earning power. When these years are lost, the former at-home parent cannot expect to go back into the workforce at the same responsibility or pay level that they previously held.

What about your 401k?

Hopefully, your 401k is set to deliver you a nice little nest egg once you reach retirement. However, if income has been placed in that account during your marriage, that makes it a marital asset, and thus subject to property division should you choose to divorce. The question is how should you and your soon-to-be ex-spouse divide it up? 

The website 401HelpCenter.com lists four common solutions that others in the past have relied on. These include: 

  • Liquidating your ex-spouse's portion of your 401k: While this immediately resolves the issue of equitable division, it is viewed by many as the least attractive option due to the fact that pulling from your 401k prior to you being eligible for distribution can result in significant tax penalties. 
  • Rolling your ex-spouse's portion into an IRA: Again, this allows you to immediately address the division issue, plus it may be easier to sell to your ex-spouse because it offers him or her more control over his or her portion. There are also no fees or penalties associated with it. However, it only is an option if you are over the age of 59. 
  • Offer your ex-spouse additional assets in exchange for the full value of your 401k: This lets you retain complete ownership of your account, but may require you to give up other coveted assets. 
  • Split the value of your 401k evenly: You can ask for a Qualified Domestic Relations Order that lists your ex-spouse as an alternate payee on your account. This allows you to split your 401k into two accounts, with you continuing to contribute to both while each of you manage your respective account's assets. 

Reviewing your alimony options in Tennessee

One concern that you may have surrounding the end of your marriage in Germantown may be how you will be able to get along financially without being able to rely on your soon-to-be ex-spouse's income. Many of those that we here at the Thomas Law Firm, PLC have worked with share your same situation, having put their own professional pursuits on hold so that their spouses could cultivate theirs. The law recognizes such a sacrifice, which is why it allows you to recieve alimony. 

There are many misconceptions about alimony in Tennessee, the chief of which is that such support always continues indefinately. Tennessee state law actually recognizes four different types of alimony. These include: 

  • Rehabilitative alimony: This type of alimony is meant to support you until such time as you are able to build up or rehabilitate your earning capacity to the point of being able to secure employment that will allow you to enjoy the same standard of living you did during your marriage. The court determines the length of such an obligation, although that time may be extended if needs be. 
  • Alimony in futuro: Alimony in futuro is awarded when it is believed you will not be able to secure your marital standard of living on your own. Such an agreement usually lasts until yours or your ex-spouse's death, or you remarry. 
  • Transitional alimony: This is usually a short-term alimony agreement awarded in cases where you are immediately able to secure gainful employment, yet you need financial assistance while transitioning into single life. 
  • Alimony in solido: Also called lump sum alimony, this type can cover both your long- or short-term support, yet is paid up front. 

Testimonials SEE WHAT OUR CLIENTS ARE SAYING

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Mr. Thomas kept me well informed during my lengthy divorce. He always returned my calls within 24 hours, usually sooner. He gave me very good advice and listened to all of my concerns. He always told me what I needed to hear, not necessarily what I wanted to hear. I found him to be a nice, honest and hard-working lawyer.

- Carrie -

Justin and his staff are a great team! Justin represented me after the divorce was finalized and fixed what the original attorney told me was set in stone! Everything we asked for we received, from both the court and the staff. It has been almost two years and I can still contact them for anything I need and they are ALWAYS more than willing to help! I recommend Justin and his staff as much as possible. There is no way I would ever use anyone else!

- Robbie -

Justin Thomas represented me in a divorce and I was very pleased with his work ethic and representation. He was extremely professional and cared about what was in the best interest of my son and me. He kept the cost of the divorce to a minimum, which was great! I believe he provided excellent representation and honestly cared about me, the outcome of my divorce, and most importantly, my time with my son. I have recommended Mr. Thomas to several friends and will continue to do so.

- John -

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Thomas Family Law Firm, PLC
7642 Poplar Pike
Germantown, TN 38138

Phone: 901-443-4599
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