Hoge Partners, PLLC

Louisville Family Law Blog

Beware of financial lies in the family business during divorce

Running a family business takes a lot of work. When you and your spouse work together on the task, you both are probably attached to the company. This is a good thing as long as the marriage is solid, but it can cause a lot of problems if divorce becomes a factor. If you are heading toward divorce and have a family business, you need to be aware of what's going on with the company.

There is a hidden danger in some family businesses when it comes to divorce. If one spouse handles the finances, the other one might not be aware of a phenomenon known as Sudden Income Deficit Syndrome (SIDS) occurring. Unfortunately, SIDS can directly impact the settlement you receive for the divorce and the decisions you make regarding the business.

Co-parenting requires close communication with your ex

A co-parenting relationship is one that is best for the children, but it is sometimes difficult for the parents. When you are in this situation, you have to take the time to think about what type of relationship you are comfortable having with your ex. If you're co-parenting, you will be working closely with them.

One of the most important points to remember when you co-parent is that you and your ex must have open communication. This can be handled in a variety of methods, including in person, over the phone or electronically. It might be necessary to set limits to when you will communicate unless there is an emergency. For example, you might say that from 8:00 p.m. until 8:00 a.m., only emergency calls are accepted. Be sure to abide by the rules you and your ex set.

How does the new tax law impact divorce settlements?

New tax law is not only affecting people’s standard deductions but also for the first time in 70 years, it is affecting the rules of alimony. While under the previous tax law, alimony payments were tax-deductible for the payer and counted as taxable income for the payee, beginning in 2019 the rule has changed. If you reached an alimony settlement after the first of the year, you will no longer be able to write it off as a deduction and the ex-spouse receiving it, will no longer have to report it as income. 

 

Prenuptial agreements can only include specific points

Prenuptial agreements can provide protections for both parties. It is imperative that both adults take the time to ensure that they are aware of what the agreement states. They must ensure that they are only including valid points in the agreement.

One of the primary considerations that must be included in the premarital agreement is who gets what property. Any major purchases must be covered. There are state laws that apply to property division, but these laws can be put aside in order to comply with the terms of the prenuptial agreement. For this reason, you must ensure that you are fully prepared to handle the ramifications of the prenuptial agreement if the marriage does end.

Attachment can't dictate actions in property division

The things that you've accumulated during your marriage will have to be divided when you are going through a divorce. It might be difficult for you to think about having to do this because it might be a daunting task. The more you have, the more work it is going to take to get through it all. We know that you might not feel prepared to handle this property division process. We are here to help you through the legal aspects of the matter.

One thing to consider is how to balance the asset division with the debt load. This is important because you don't want to be stuck with all the debt and none of the assets. Some people don't think about the various types of assets that they have to split. There are some that won't require any upkeep or have any related expenses. Others, such as homes or real estate, do have upkeep costs. You will have to make the payments, cover the insurance, pay the taxes and take care of maintenance and repairs. This can chip away at some of your savings or income.

Joint custody: Kentucky law sets this as the presumptive standard

In 2018, Kentucky became the first state in the country to have a law that presumed joint custody was the best option for the children whose parents were divorcing. When Governor Matt Bevin signed the bill into law, there were people on both sides of the matter who had very strong feelings about what it was going to do. There are a few things that have to be considered about this bill if you are a parent that is currently going through a divorce or think your marriage is heading toward dissolution.

First, the bill does have a provision that will prevent a parent from having custody of the child if that adult committed acts of domestic violence against the other parent or the children. It is up to the judge presiding over the case to determine if this is a factor in the case. Some people aren't thrilled about this point because they argue that there is a chance that a person who was abusive in the home might be able to gain custody because there weren't ever domestic violence charges filed.

Business valuation is critical in a contentious divorce

Going through a divorce when you own a business adds another level of difficulty to an already challenging situation. You have to think about the property division process as it relates to your personal affairs, but you also have to consider the business that you worked so hard to build.

The fate of the business is set already if you addressed it in a prenuptial agreement. If this is the case, you need to review that agreement to find out what is going to happen.

What happens to retirement benefits during divorce?

Dividing your property may be one of the most difficult parts of your divorce. Deciding what you are going to keep and what your spouse is going to keep can be emotional, but it can also affect your long-term goals, like retirement.

Retirement benefits that you or your spouse earned may be divided during your divorce. However, there are many factors that can affect if the benefits will be divided and if so, how much of the benefits each spouse is entitled to.

Mistakes made during high-asset divorces

Mistakes made when dividing property during a divorce can lead to a needless waste of money. Especially when dividing a substantial amount of assets, the process can be complex. It’s necessary to consider the division of 401(k)s and other retirement accounts, global assets, businesses, and real estate holdings.

Any division could lead to tax consequences. This includes capital gains treatment. Recent tax code changes can also impact other considerations. For example, one Kiplinger article notes that tax code changes will lead to complications concerning alimony as certain tax breaks will no longer be available to alimony recipients. Changes to the federal tax code will also impact the division of retirement accounts.

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Louisville, Kentucky 40202

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