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.
NACOL LAW FIRM P.C.
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Dallas, Texas 75231
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Attorney Mark A. Nacol is board certified in Civil Trial Law by the Texas Board of Legal Specialization