Blog2024-06-22T18:10:47+00:00

Divorce And Your Business: Who Gets What

In today’s unpredictable economy there has been a continuing growth of small businesses and a substantial decrease of existing established businesses in Texas. In the regrettable instance of “Divorce” how may the “Family Business” be divided between a dissolving couple to reach a fair and reasonable result for both parties?

In such a situation, an experienced Family Law Attorney with the aid of economic experts becomes critical in establishing a fair and equitable price on the business, consulting the client on their rights relative to the business, helping with negotiations for a business entity to be sold, transferred, or appraised, and making sure the client’s rights are protected in the transaction.

The most important fact to establish is a credible determination of the true fair market value of a business and how the business or the business assets are to be divided between the spouses in the divorce.

The dividable interest is determined by the fair market value of the business. This value is the price a willing buyer would pay and a willing seller would give in a purchase with both buyer and seller having reasonable knowledge of the relevant facts of the business and neither being under pressure to buy or sell the business.

During a Divorce, the concept of a credible hypothetical buyer and seller may be determative and very complicated. Going through a divorce is difficult enough, but fairly determining the true value of the business in the process can be complicated and sometimes expensive. There are always two different ideas in every divorce and the family business will bring out the some very serious opinions of just what is the “fair market value”! Ideas may range from too high in today’s economy to too low base on emotional attachments, complicated further by feelings as to possible other family members who own or claim parts of the business. The value placed on proposed purchases that are not part of an arm’s length transaction may not be relevant to the correct fair market value.

To help determine the fair market value and complete the transaction fairly for both parties the family law attorney must be able to obtain and review all business and financial records, financial statements and tax returns, and any other pertinent information for the preceding 5-7 years. Often an independent business appraiser or CPA will be retained to help in determining a credible and correct valuation of the business that a Judge or Jury will respect.

Children – The Innocent Bystanders of Divorce

Divorce, in many cases, has a life-altering impact on a child’s development and well-being.  Given that one out of every two marriages ends in divorce, thousands of children are impacted each year. Divorce places enormous stress on a child trying to adjust to new feelings and rapidly changing situations in their lives. The resulting instability often leads to resentment towards the child’s parents and a difficulty acclimating to all the abrupt and immediate changes in a child’s life.

Children perceive divorce as a very traumatic event and are very concerned about their security. Many children internalize the dissolution and blame themselves for the breakup. They are scared that both parents may leave them.

Some very disturbing research on children and divorce has just been released by the Census Bureau Study, “The Marital Events of Americans: 2009”.

  • *1.5% of US children live in the home of a parent who divorced in the last year. The average age of the child is 9.8 yrs. old and the male/female ration is 1:1.
  • *64% of the children were White, non- Hispanic children, with the largest percentage living in the South (41%).
  • *Children living with a divorced parent are likely to be in a household below the poverty level (28%) and more likely to be living in a rented home (53%).
  • *Most children live in a mother headed households (73%). Because mothers have lower earning potential in the labor force, the family often lives below the poverty level.
  • *These children of divorce are often living with their parents’ unmarried partner (13%).  Only 5% of the children are living in a household with a married couple.

Children of divorce often suffer from anxiety, depression and reduced self-esteem issues.  Robert Hughes, associate professor in the Dept. of Human Development and Family Science, Ohio State University, found that children from divorce are more aggressive and more likely to get in to trouble with school authorities or police during adolescence. Also children from divorce are more vulnerable to becoming a victim of violence or become a perpetrator of violent acts on themselves and or others.

If you are considering divorce, carefully consider the impact on your children. To help children through this difficult time, parents must realize and accept that they are responsible for this situation and that their children often suffer as a result of the parent’s decision.

Parents should be very sensitive to the child’s emotional needs to ensure the best possible adjustment of his or her mental, physical, spiritual well-being towards a healthy, responsible adult.  Remember! Your child is the “Innocent Bystander.”

Seek professional help if you child is struggling with the changes in his or her life. Your attorney knows a resource that may be available to address your child’s pressing needs.

Unique Possession Orders that Work with a Fathers Profession

Many professions create impositions on conservators making a standard possession order inapplicable and unworkable. The Court may deviate from a standard possession order if the order is inappropriate or unworkable in reference to the schedules of both the conservators and the child. Unique professions and irregular school schedules for children allow the Court to have flexibility to deviate from a standard possession order that is in the Best Interest of the Child. There are multiple ways in which the Court may depart from a standard possession order to fulfill the needs of all parties involved with the custody of the child.

First, the Family Code § 153.254 states that the Court will be allowed deference to modify the standard possession order if work schedules of either conservators or the school schedule of the child is irregular. The Court must attempt to narrowly tailor the modifications to keep the new possession order as similar to the standard possession order as possible. This instance most commonly occurs when the Managing Conservator and the Possessory Conservator cannot reach an agreement and one of the two Conservators has a unique profession such as a firefighter, police officer, or airline pilot. The working hours of these jobs allow the Court to modify the standard possession order even if both of the parties do not comply with the changes. The modifications must be made only if it is in the Best Interest of the Child.

Secondly, the standard possession order may always be modified if it is by the mutual agreement of both the Managing Conservator and Possessory Conservator. Family Code § 153.007 is the Agreed Parenting Plan Statute and allows for both parties to agree on a standard possession order for the child. This statute was passed to promote amicability in settlement for child custody issues and to give flexibility to the parents if they are willing to agree on custody terms. The Agreed Parenting Plan must be in the Best Interest of the Child for the Court to approve. If the Court grants the Agreed Parenting Plan then the Managing or Possessory Conservator will have a remedy as a matter of law for any violation of the agreement committed by either party.

Finally, both Conservators may enter into a Mediated Settlement Agreement under Family Code § 153.0071. A Mediated Settlement Agreement is the only time in which the Court will NOT look at the Best Interest of the Child when granting the custody agreement.

The Mediated Settlement Agreement § 153.0071 must be:

  • In bold, underlined, and capital letters that the agreement is NOT REVOCABLE
  • Signed by Both Parties to the agreement
  • Signed by the lawyers (if represented) of each party

The Mediated Settlement Agreement is binding and not revocable so if the Conservators wish to go this route they must understand that what is in the agreement will be held as binding. This method can be used to modify or change a standard possession order and the Court will not look at the Best Interest of the Child regarding the agreement, unless there exists a credible threat of domestic violence.

These are the methods in which a unique possession order may be obtained to accommodate irregular schedules or working hours of both the conservators. Any possession order must be correctly drafted and all future contingencies must be accounted for. An experienced lawyer must be contacted to safeguard an individual’s custody rights of their children and to make sure that a fair custody arrangement is obtained.

Concerns About Special Needs Children in a Texas Divorce

Parents of a special needs child face many challenges while raising and nurturing their child.  Many marriages falter and end in divorce due to the stressful demands required of parents with a special needs child. The stressors and emotional pressure that exists prior to the initiation of a divorce frequently accelerates during the divorce process. A special needs child is seriously affected by their parental decisions made during a divorce.

A divorce does not bring out the best in any couple. In the case of a special needs child, thoughtful and prudent care of the child should always be the main objective of both parents so the child knows that he/she is loved by both parents and is not at risk.  A special needs child will experience serious emotional and behavioral problems during this time becoming more vulnerable and not knowing what is happening in life.  The child is often afraid that he/she is losing Mom and Dad due to false and misplaced self-imposed guilt.

Many parents have already struggled with questions surrounding their child’s special needs such as correct diagnoses or the validly of treatments for their child’s conditions.  During serious custody battles, such concerns become the focus of intense parental conflicts.

Some of the more serious concerns are:

  • A child’s reactions to overly permissive or excessively rigid parenting

  • Use and dosage of prescribed medicines for a diagnosed problem

  • Proper diagnosis being made by a competent professional

  • Whether a professional label and diagnosis will be noted in school records

  • Whether a child be placed in special education classes for leaning or emotional disabilities. Whether one parent is so occupied with the special need child that the parent has lost perspective on how to best manage the child

Often one parent accepts a child’s diagnosis given by the specialist and actively advocates for the child, while the other parent may remain in denial of the child’s obvious needs. Which parent is actually and consistently working in the child’s best interests?

Special efforts are needed when setting up possession schedules for your special needs child. Both parents must understand the nature of the child’s physical/emotional problems and the level that the child can function.  When the child spends time in each parent’s home, both parents must reasonably work together and agree on a parenting approach that addresses the child’s needs.

When parents cannot agree upon the child’s actual needs and course of care, the court may appoint a specialist to conduct a complete evaluation of the child.  From this evaluation the specialist will offer specific opinions to the parents and court regarding the nature of the child’s special needs and specifically address these needs.

In a divorce involving a special needs child many joint decisions are critical to and impact a child’s self-esteem.  Other family issues and problems may need to temporally be put aside between the parents to assure a special needs child will fully receive the attention needed.  We suggest that in the divorce decree a parenting plan be included setting out specific provisions for the care of the child.

Some suggested items to include in this Plan would be:

  • Can the child be cared for in the home or an outside facility and how would these costs be covered?

  • Medical, educational, and therapeutic interventions and decision making authority

  • Treatments not covered by insurance. Who is responsible as to the authority and cost?

  • Working with the child’s school to implement plans for the educational needs of the child.

  • Care decisions on parents’ ability to work outside the home with a special needs child

  • Handling of Lifetime care and support and the cost necessary for the special needs child

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