When there are a lot of assets, such as in high net worth marriages, that need to be decided on in divorce, it’s important to remember the tax repercussions that can follow those decisions. That couldn’t be truer than this tax season. As you prepare to pay taxes for 2018, you’ll want to make sure you have a complete understanding of how new laws will effect your tax filing.

Preparing for Tax Season with New Divorce Laws

When retirement accounts, large pieces of property, and alimony are at stake, divorce gets tricky. Making these decisions trickier for both lawyers and feuding couples, it’s the fact that big changes are in place this tax season.

A number of tax law changes were implemented at the end of 2017 but a big disruption won’t happen until Jan. 1, 2019. The biggest direct impact is on alimony. Alimony will no longer be a tax deduction for the person paying it, and it will no longer have to be claimed as income by the person receiving it.

At the beginning of 2018 it was predicted that this would cause a big rush on divorces, due to the fact that people would try to get the divorce in before the year changed. Turns out, that big rush hasn’t quite happened.

According to divorce attorney Malcolm Taub, of Davidoff Hutcher & Citron in New York, “It is a drastic change, but it seems like people are living with it.”

While the determination of the actual dollar value of alimony is relatively easy, the biggest sticking point is where the money for the settlement is coming from, and how well-prepared each side is for the long-term.

Divorce Over 50

When couples over 50 decide to divorce settlements can become increasingly complicated due to the fact that there are less “working years” left for either person.

For couples over 50, a lot of the traditional gender roles still exist – the husband is the breadwinner and the wife stayed at home to raise the children. While this is changing with the younger generations, this still applies to many older couples that are divorcing now.

Among high-net-worth clients, the two biggest assets are usually the house and the retirement accounts.

While a house is an obvious sentimental attachment, there are other big financial gains to be had by selling that family home. It’s not uncommon for divorce attorneys to recommend that the spouse who gets awarded the house sells it and puts the proceeds into an investment account for retirement.

Another often employed strategy is to “award” the house to one spouse while the other spouse gets what seems like an equivalent amount in an investment or retirement account. Taxes are then figured into the equation.

To consider are capital gains, IRAs and 401 (k) assets versus Roth assets, as well as the valuation of any private businesses. Even if you are not selling a business in the divorce, you will still need to have a valuation of it.

You’ll want to have proper legal order for any asset distributions, because the tax penalties could hit you hard on the flip side.

Claiming Alimony

Spouses receiving alimony used to be able to claim it as earned income. Under the new law, they are no longer able to claim it, and thus cannot contribute to accounts like IRAs and Roths. So if they have no other earned income, they have no way to grow their tax-advantaged retirement accounts.

This can be especially hard-hitting when the divorce settlement is not enough to get by on. Even harder hit, are those who are not old enough and thus do not yet qualify for Medicare and Social Security.

As if divorce isn’t hard enough emotionally, then you get hit with the financial side of divorce. Establishing your own credit, setting up your own independent accounts, closing joint accounts, etc… can be grueling, but unfortunately a very necessary part of starting your single life.

The Financial Side of Divorce

Before you’re able to move forward from your ex, you’ll need to take some steps to create your own financial footing. Below we outline some steps you’ll want to take.

Take Inventory

Divorce means a rebalancing of your budget, and it really is “your” budget and yours alone. While some expenses may disappear, others will become your sole responsibility. If you are not receiving alimony, you will no longer have the benefit of a secondary income to ease the debt.

How an Experienced Los Angeles Alimony Attorney Can Help

Divorce and spousal support cases in Los Angeles can be complicated, especially when emotions are running high and both parties are feeling exposed and financially vulnerable. Our attorneys at Divorce Lawyers Los Angeles often encourage divorced or divorcing couples to attempt to reach a workable and amicable alimony payment agreement on their own outside of court, as negotiation and settlement are almost always preferable to going to trial. However, we want what’s best for you and your family, and we will stand by your side every step of the way, whether you end up going to court or not. One thing to keep in mind if your case does go to trial is that the judge has a great deal of discretion when deciding on spousal support payments. This is why it is so important to have a thorough understanding of the factors the judge will consider when deciding how much alimony you will receive or pay. An experienced family law attorney can help you understand the complexities of your spousal support agreement, help you calculate alimony payments and prepare the forms required by the court, among other things.

Credit Reports

It’s also a good idea to look at your credit reports to see what your personal financial standing looks like. Creditors will use these reports to asses whether or not to give you a loan. Review these reports very carefully to ensure that there are no errors. This report will be able to give you an idea of what to expect as you try to establish new credit on your own.

Close Joint Accounts

Divorce doesn’t relieve you of any joint debts you and your ex incurred during the course of the marriage. Any joint accounts that you have with your spouse will still have your name on them, and thus will impact your credit score. That means a creditor can come after you if your spouse falls behind on a payment – even if you have a verbal agreement with your spouse.

Close all joint accounts as soon as possible and have everything that you are responsible for re-financed under your name. For joint credit cards, you should be able to transfer the balance to a new card so that you can close the joint card that the two of you shared.

Until all of your joint accounts have been closed, it’s crucial that you continue to make at least the minimum payment on all of those bills each month. You do not want any lapses of payment in your credit report. If your ex agrees to make the payments, follow up to ensure they did. A single late payment can drop your credit score by anywhere from 60 to 80 points, according to FICO data, assuming an initial credit score of 680. Though the effect on your credit will diminish over time as your more recent payment history takes precedence, that late payment can stay on your credit report for up to seven years.

Establish Your Own Credit

If you already had an established credit history before you got married, or if you were a joint account holder on your spouse’s accounts, you probably won’t have any trouble obtaining credit in your own name, provided your previous credit history was good. If this is not the case, you might need a few months to establish yourself as a responsible payer in the eyes of creditors.

You can do this by opening a credit card and using it responsibly.

You can also sign up for a secured credit card. These require a security deposit, but your on-time payments are reported to the credit bureaus every month, so consistently paying on time will raise your credit score as if you were using an ordinary card.

Side Note: Changing Your Name

If you’re thinking about changing your name back, do this before you open any new credit accounts so that they will be listed in your new legal name. Additionally, you should get in contact with the institutions where you have existing financial accounts and notify them of the name change so they can update their records.

Working with Divorce Lawyers Los Angeles

 Our experienced Los Angeles divorce attorneys can assist with every aspect of the divorce process and will aggressively represent your case before a judge if it comes to that. Whatever the circumstances surrounding your case, we still stand by your side and ensure that your legal rights are protected throughout the process.

 For more information about California divorce law and the divorce process, contact Divorce Lawyers Los Angeles for a risk-free initial consultation. Our main goal as divorce attorneys is to help you evaluate your options under California law and make informed decisions that protect your interests and legal rights. Don’t wait to get help, call our Los Angeles legal team today at (213) 550-4600.

Divorce Lawyers Los Angeles

5455 Wilshire Blvd
21st Floor
Los Angeles, CA 90036

Phone: (213) 550-4600

Web: https://divorcelawyerslosangeles.com

While divorce is often times a mutual decision, there are incidents where both parties do not agree to separate. When parties are not in agreement when it comes to ending their divorce, it can make discussions regarding property division, custody, and support decisions almost impossible. When the divorce is being contested, legal separation might be an option to consider.

Other Options – Separation

A couple does not always need to go right to divorce.  Legal separation is an option for couples who are determining if they actually want to end their divorce.

California is a no-fault state, and both a legal separation and a divorce require the same declaration of “grounds for divorce.” The two options for “grounds” are irreconcilable differences or the incurable insanity of your spouse.

You must have lived in the state for six months before you file for divorce, but there is no such residency requirement for a legal separation. After filing for divorce, you must wait an additional six months before your divorce can be final, but there is no waiting period for a legal separation. Once you file for legal separation, it is in place.

As part of a legal separation, you’ll want to draft an agreement. This can be beneficial should you decide to go through with a divorce.

Included in a Legal Separation Agreement

A decree of legal separation addresses the same things a divorce decree does. This includes any alimony or child support and any issues of custody, visitation and property distribution. The terms of each are binding.

To note: a legal separation does not end your marriage. You will not be able to remarry.

Why Do Couples Choose Legal Separation?

Often times, drafting an agreement gives couples the opportunity to sit down and talk about all the issues they might be facing. A legal separation also allows for spouses to stay on the same health insurance. This can be very helpful for spouses that

Other Benefits with Legal Separation

Legal separation can be a great option for couples who no longer want to be married but, for personal reasons, divorce is not an option. In California, however, there may be one other advantage – you can hasten the divorce process by filing for a legal separation first.

Moving Forward with Divorce

If you decide to divorce after your separation, California law allows you to convert your legal separation to a divorce. This can be done after your separation is final or at any point during the legal process. Either spouse is able to file a request for the conversion. This will require additional paperwork.

Another way to move your divorce along without establishing residency for 6 months (which is required in California), you can file for legal separation immediately. The six-month waiting period for a final divorce decree begins as you work through the legal separation procedure. When it has expired, you are able to file to convert your matter to a divorce.

Even if you feel like your marriage can be saved, and you do not want to pursue divorce, it’s advised that you work with a family law attorney. You’ll want to take actions to protect your assets, credit, home, children, and future right to support settlements. If your spouse files, a temporary hearing can be held in as little as a few days.

Do not feel like calling an attorney is “giving up” on your marriage. At Divorce Lawyers Los Angeles, our lawyers are well-versed in a variety of family law-related matters and we can help you understand the legal, emotional and financial implications of your divorce and the various issues that go along with it. Our legal team strives to handle each and every case as if it was our own and we can help you navigate the complexities of the California legal system so you can achieve the maximum recovery in your Los Angeles divorce or family law case. We will do everything in our power to make you feel comfortable and informed as you navigate the divorce waters.

Family Law

Divorce has many aspects, all of which need to be ironed out. This type of litigation falls under the title of family law. Family law covers the following aspects of divorce:

Child Custody

Child custody is the legal and practical relationship between a parent and a child in the parent’s care, involving the duty to care for and support the child.

One of the most important considerations during divorce should be establishing parental custody and visitation rights. There are two main types of child custody under California law: legal and physical custody.

Legal custody (California Family Code § 3003) can be joint, in which both parents share the right and responsibility to make important decisions about their children’s health, welfare and education, or sole, in which one parent is granted the exclusive responsibility for making these decisions, though the other parent may still have visiting rights. It is the presumption of the court in most divorce proceedings that it is in the best interest of the child to have continuing contact with both parents. However, if the parents are unable to agree on a parenting plan, it is up to the court to decide how they will share time with their children. Parents with legal custody are responsible for making the major decisions or choices about their children’s schooling or child care, residence, religious activities, mental health needs, medical needs, travel and extracurricular activities.

Physical custody (California Family Code § 3004) can also be joint, which means the children live with both parents, or sole, which means the children live with one parent for most of the time and may schedule regular visits with the other parent. California law favors joint legal and physical custody when both parents can agree to it. If they don’t agree, the court will establish a parenting plan that is in the children’s best interests.

Determining child custody is a sensitive, stressful matter that can easily become a point of contention among couples who are unable to agree on a shared plan for co-parenting their children. Our family law attorneys at Divorce Lawyers Los Angeles have experience guiding divorce clients through productive child custody negotiations and can help you and the other parent create a workable, amicable custody agreement that meets the needs of the two of you and your children as well.

Alimony / Spousal Support

Alimony, also known as spousal support, is an individual’s legal obligation to provide financial support to a former spouse after divorce.  In most cases of divorce in Los Angeles, one spouse earns more than the other, and during the marriage, the couple shared household income, which means the spouse who earns less suffers a far greater loss when the marriage ends.

Spousal support, more commonly known as alimony, payments are ongoing, periodic payments made from one spouse to another under a legal separation or divorce order issued by the court. Spousal support is intended to help an economically disadvantaged (or lower-earning) spouse continue to enjoy a similar standard of living after he or she is divorced. In most cases in Los Angeles, the spouse who earns a higher income is ordered by the court to pay alimony to the other spouse, though whether you are entitled to alimony in California divorce proceedings depends on a number of factors, including: your earning capacity, the length of your marriage and any documented history of domestic violence between you and your spouse. There are two types of spousal support in California:

• Temporary spousal support – Set at your initial hearing and paid until a complete agreement is reached, or until a Final Order of Divorce is entered
• Permanent spousal support– Paid for an indefinite period of time in an amount that can be modified later, if and when the financial circumstances of either spouse change

To file for spousal support in Los Angeles, the party requesting the payment must ask the judge to make a spousal support order, and this order must be issued as part of either a divorce or legal separation, or as part of a domestic violence restraining order. You can either ask that the alimony be paid while the case is going on (temporary spousal support) or once the divorce or legal separation becomes final, as part of the court judgment (permanent spousal support). Under California law, spousal support payments are automatically terminated upon the death or remarriage of the supported party. In some cases, the spousal support agreements can be changed, if the spouse making the payments suffers a significant financial hardship, or if the spouse receiving the payments suddenly requires less support.

Child Support

Child support is an ongoing, periodic payment made by a parent for the financial support of a child following the end of a marriage. The regulation of child support is an important issue among divorced or divorcing parents in Los Angeles, and the amount of child support owed by one parent to the other depends on a number of factors, including:

• How much money the parents earn or can earn;
• How many children the parents have together;
• How much time each parent spends with the children;
• Health insurance expenses;
• The actual tax filing status of each parent;
• The support of children from other relationships;
• Mandatory retirement contributions;
• Mandatory union dues; and
• The cost of sharing daycare and uninsured healthcare costs.

Child custody, support and visitation arrangements are often the most hotly contested issues in divorce litigation and settlements in Los Angeles. With the cost of living in Los Angeles being so high, establishing the appropriate payment of child support from one parent to the other is one of the most important steps divorced or divorcing parents will have to take.

Property Division

The division of community property, or property acquired by the couple during their marriage, such as high assets, professional licenses, business ownership and other complex financial matters can be one of the most contentious issues to iron out during a divorce. In the state of California, complex property division involves the distribution of high-value marital assets, including retirement accounts, ownership rights to a business, professional practices and investment portfolios, among others, which can be a hotly contested issue for some couples.

California is a community property state, which means all property and assets (and debts) acquired by the couple during marriage is legally considered community property owned by both spouses equally and should therefore be divided equally in divorce. Some of the high-value assets at risk in high net worth divorces include:

• Pensions
• Stock options
• Corporate business assets
• Business valuations
• Inheritances
• Professional practices
• Investment portfolios
• Residential and commercial real estate
• 401(k)s, IRAs and other retirement accounts

Los Angeles divorces involving complex property division due to significant assets, professional licenses, business ownership and other complicated financial matters are often highly contentious and high profile, but they don’t have to end in a bitter legal battle.

Free Family Law Consultation in Los Angeles

Legal matters that fall under the umbrella of family law tend to be contentious and therefore require a great deal of experience, compassion, communication and attention to detail. Far too often, family law cases that could have been settled amicably end up bitter court battles because the parties involved attempted to handle the matter on their own without reputable legal help, or they hired an attorney with no experience in family law. At Divorce Lawyers Los Angeles, we understand how difficult and frustrating the legal process can be, especially when dealing with sensitive family law issues, and our attorneys are committed to helping you achieve a favorable outcome, whether it is through private negotiation, third-party mediation or at trial. For more information about family law cases, the divorce process and spousal or child support in California, or to schedule a free consultation with a knowledgeable family law attorney, contact Divorce Lawyers Los Angeles today at (213) 550-4600.

Divorce Lawyers Los Angeles

5455 Wilshire Blvd
21st Floor
Los Angeles, CA 90036

Phone: (213) 550-4600

Web: https://divorcelawyerslosangeles.com

Since divorcing last year, Channing Tatum and Jenna Dewan have not followed a “consistent or formal” co-parenting schedule or custody arrangement. Channing, in prioritizing his relationship with their daughter Everly, has hopes that having an official custody arrangement will help the five-year-old “thrive even more.”

An Unusual Celebrity Co-Parenting Schedule

According to court documents, Channing hopes to have a custody and co-parenting arrangement that is “equal, mutual and self-executing.”

Tatum also requested custody on Mondays and Tuesdays, while Jenna will be responsible for her care on Wednesday and Thursday. The parents will alternate visitation on the weekends and “equally divide and alternate” custody during the holidays.

The only holiday that the parents will try to spend together is Halloween, during which they “shall try to work together to try to spend Halloween together, trick or treating with Everly from 5:00 p.m. to 7:00 p.m.”

Despite the fact that visitation has seemingly been inconsistent, Channing says, “Since our separation and on the occasions that we have been together, Everly appears very happy and comfortable when she is with [Jenna] and me.”

He adds, “In my opinion and experience, Everly has appeared to adjust to our separation and living in two homes exceptionally well.”

Intentional About Co-Parenting

Divorce is hard on all fronts. If you’re going through divorce, have gone through divorce, or are about to file, you need to do things that will allow you to move on. These things very well might feel impossible on most days. Take each day at a time. Give yourself some grace. And take a look at our tips for keeping your head up.

Moving Forward After Divorce

Divorce will change your life in more ways than one. Regardless of how strong you are, divorce is challenging – in ways you never even expected. As you face a range of emotions – from anger to relief, to confusion and humiliation, depression, and fear, you need to remember one thing: you WILL get through this.

Some Tips to Help You Move On

• Focusing on what you don’t have and what you can’t do will drive you insane. Focus on what you have control over and let the rest pass on by.
• Forgive yourself.
• Find ways to treat yourself.
• Celebrate the victories.
• Don’t be afraid to ask for help. This can be so difficult. Learn to set your pride aside and ask for help when you need it.
• Journal and record your thoughts and feelings from day to day. When you’re able to look and read back where you were, you’re able to see what progress you’ve made.
• Go for walks.
• Don’t be afraid to consult a therapist.
• Learn patience.
• Focus on your children and their happiness.
• Be proactive in your moving forward process and do everything you can to stay on track. This means working out, eating well, getting enough sleep.
• Take yourself out on dates.
• Remind yourself of what really matters.
• Take up a new hobby – maybe there’s something you’ve always wanted to try but were never able to.
• Find a support group.
• Figure out a co-parenting schedule that works for you.
• Know that you will feel lonely sometimes. Find new and fun ways to deal with those feelings.
• Search for inspiration.
• Stay involved in the things that make you feel good.
• Find something new that makes you feel good.
• When you feel like you can’t go on any further, dig deep. You never know how strong you are until you hit that bottom.
• Remember that you are not alone.

Hiring an Attorney

Going through a divorce can be one of the most difficult, stressful and emotionally draining experiences in a person’s life, and hiring an attorney early in the process can help avoid the mistakes that inevitably occur when parties seeking divorce represent themselves in court. The legal system can be confusing for anyone without an extensive legal background and family law cases, in particular, can become complicated and messy when not dealt with properly. Our attorneys at Divorce Lawyers Los Angeles have the experience and resources necessary to handle high-asset divorces in L.A. and the surrounding areas, and the competence to resolve critical disputes, including those that involve marital property division and child custody and co-parenting arrangements. Whether your California divorce case requires aggressive negotiation, mediation or representation at trial, hiring a knowledgeable attorney to represent your case can help ease any concerns you may have about the outcome of your case and may even help resolve your case more quickly.

How to File for Divorce in California

California is a no-fault divorce state, which means that either party in a marriage has the right to file for divorce for no other reason than “irreconcilable differences,” and property settlements in CA divorce cases are not influenced by the behavior of either spouse, although child custody and visitation rights can be. Under California Family Code § 2320, in order for a judge to grant a divorce in California, one of the spouses must have been a resident of the state for six months, and in most cases, the individual seeking divorce must file in his or her county of residence, where he or she must have lived for at least three months. Once the divorce papers have been filed, California law dictates that the filing party must wait at least six months from the date the other spouse received the paperwork before the divorce can be finalized.

The Divorce Process

The steps you need to take to file your divorce will depend on the particulars of your situation and circumstances. A divorce where the parties have been married for a relatively short period of time, have no children, and little property or debts is typically less involved than a divorce where the parties have been married for a long period of time, where there are minor children, or where there is significant property or debt to divide.

The divorce process is also made simpler in cases where both parties want to and agree to divorce. In cases where one party wants a divorce and the other does not, the opposing party might choose to prolong the process as much as possible.

If both parties are able to agree to the terms of the divorce, the process will be smoother as opposed to one where both parties are constantly disagreeing and fighting over the terms.

Filing a petition

The first step in the divorce process is filing a petition. Even when both parties agree to divorce, one of them will need to file a petition that states the grounds for the divorce. The grounds for divorce vary depending on the jurisdiction. All jurisdictions allow for some type of no-fault grounds such as “irreconcilable differences”, but only a few states still consider fault grounds for divorce, such as adultery or abandonment. California is a no-fault state so the grounds will be “irreconcilable differences.”

Temporary Orders

Next, temporary orders will need to be put in place. These orders are for spousal and/or child support and custody. A temporary order is usually granted within a few days and remains in effect until a full court hearing.

Service of Process

The party that files the divorce also needs to file proof of service of process. This is a document that shows a copy of the divorce petition was given to the other party. If you are working with an attorney, he or she will be able to arrange this.

Response

The party who receives service of process then needs to file a response to the petition. The responding party may choose to assert a defense to the grounds. If there is disagreement as to property division, support, custody, or any other issue, this should be set out in the response.

Negotiation

If the parties don’t agree on all the issues such as child custody, co-parenting schedules, or spousal support, they will need to try to negotiate their differences. A court may schedule settlement conferences in an attempt to have the parties resolve their issues. If the parties disagree on child custody and visitation, the court may also choose to order mediation, evaluation of the children and parents by a social worker or other court employee and that a lawyer or guardian ad litem be appointed to represent the children. Other issues that may need to be negotiated are the property division and any spousal support.

Trial

Any issues the parties cannot resolve between themselves will be decided at a trial. However, going to trial takes longer, costs more money, and may have less predictable results.

Order of Dissolution

The order of dissolution ends the marriage and spells out how property and debts are to be divided, child custody, support and any other issues. When the parties negotiate their own resolution to all of the issues, they draft the order of dissolution and submit it to the court. If the order of dissolution complies with legal requirements and both parties entered into it knowingly and willingly, then a judge approves it. Otherwise the court will issue an Order of Dissolution at the end of the trial.

How an Experienced Divorce Lawyer Can Help

Not all divorce cases in California go to court. In some cases, couples can resolve their divorce disputes through negotiation or mediation, during which an attorney can make sure your best interests are being represented. Too often, couples filing for divorce believe they can handle the proceedings on their own and end up making a bigger mess of their situation than they started with. While we do encourage spouses filing for divorce to reach an agreement outside of court and try to avoid divorce litigation altogether, especially when children are involved, our experienced Los Angeles divorce attorneys can assist with every aspect of the divorce process and will aggressively represent your case before a judge if it comes to that. Whatever the circumstances surrounding your case, we still stand by your side and ensure that your legal rights are protected throughout the process.

Free Divorce Consultation in Los Angles

Divorce proceedings are not always simple and straightforward, especially when children are involved. In many cases, the consequences of a divorce can affect a person for the rest of his or her life, possibly resulting in a significant loss of financial support or reduced child visitation rights. A qualified divorce attorney however, can help you navigate the complex intricacies of family law and can negotiate the best settlement on your behalf. For more information about California divorce law and the divorce process, contact Divorce Lawyers Los Angeles for a risk-free initial consultation. Our main goal as divorce attorneys is to help you evaluate your options under California law and make informed decisions that protect your interests and legal rights. Don’t wait to get help, call our Los Angeles legal team today at (213) 550-4600.

Divorce Lawyers Los Angeles

5455 Wilshire Blvd
21st Floor
Los Angeles, CA 90036

Phone: (213) 550-4600

Web: https://divorcelawyerslosangeles.com

After Jeff Bezos announced his divorce in January, investors paused to see which route Amazon was going to take.  If you follow the stock market, it’s clear that Amazon stock was hit hard in 2018. Various reasons contributed, but stockholders couldn’t help but ask, ” was Bezos distracted with his divorce when Amazon was having issues?” Bezos’ divorce and Amazon’s hectic just reaffirms that when business and divorce mix, it is never easy. A successful business and a successful marriage. Can you have both?

Did Jeff Bezos’ Divorce Impact Amazon?

For those who are facing divorce while at the same time celebrating a successful business, it might seem like you cannot. The truth is, growing a business and growing a marriage can seem at odds with one another. Time is so limited and it can be hard to juggle both.

For business owners facing divorce, the threat of losing the business as part of the divorce can be an all too real threat. In cases before, businesses have been lost to divorce agreements – either because of property laws or as the result of a sale in order to raise cash.

It’s an all-too-typical scenario: You get married young with no prenuptial agreement. At the time, you have a burgeoning business with funds of about $100,000. A few years later that business is worth $5 million, your spouse has stake in the business, and now you’re having marital issues.

Strategies to Preserve Business

If you’re a business owner who is having marital issues, there are a few strategies that can help preserve your business. You’ll want to take every precaution to do so.

Here are seven strategies to consider if your company is considered a joint asset.

1. Maintain good and comprehensive business records. Keep the family’s finances separate from those of the business.
2. Pay yourself a good salary.If you have been in the practice of paying yourself less in an attempt to build the business, a court may see that as grounds to award more of the company’s assets to your spouse.
3. Fire your spouse.If your spouse is an active member of the business, you will need to ease him or her out as soon as possible. The more prominent an ex’s role in the business, or the longer he or she worked in the business, the stronger the case for the spouse being entitled to a share of the business.
4. Sacrifice other assets.In a divorce settlement, the couple’s total assets are added up and then divided. You might want to sacrifice other assets, such as retirement accounts, the family home, or vehicles, in exchange for 100 percent of the business.
5. Get a fair valuation. Use a neutral, court-appointed valuation professional to get a valuation of the business. Once you have that number, get a second opinion to review the figure before you agree to it.
6. Arrange to make any payments over time. You can arrange to pay an ex for a share of a business gradually. Monthly payments can come from the business’s cash flow or a bank loan.
7. Raise capital by selling a stake. You might be able to sell a minority stake in your business to employees through an employee stock ownership plan. Another option might be to find an angel investor or two who will pay cash in exchange for an ownership stake.

An important note: It’s rare for a business to be sold off to satisfy a divorce settlement because it would deprive the business owner of the future income needed to pay support payments.

Business Owner Divorce Lawyers Los Angeles

Filing for divorce can be a complicated process for anyone seeking to fairly divide their community property while safeguarding their financial well-being, but when business ownership and complex property division comes into play, the stakes are significantly higher. Business owners in Los Angeles have much to consider when filing for divorce, especially if they want to protect the integrity and financial security of a business they owned or acquired before marriage, or ensure a shared business venture is valued appropriately and divided fairly by the courts.

Affordable Los Angeles Business Owner Divorce Attorney

Property division laws vary state by state, and in California, any property acquired by the couple in marriage is considered “community property” to be divided equally in divorce, which may not seem fair to you if you put more money or work into the business than your spouse did. If you are filing for divorce as a business owner in Los Angeles, or if you have been served divorce papers by your high net worth spouse, it is critical that you consult an experienced divorce attorney to evaluate your options. Our legal team at Divorce Lawyers Los Angeles specializes in family law and has extensive experience in business division and valuation in divorce. We can provide you with valuable legal guidance throughout the divorce process and help you determine what property and assets you are entitled to under California’s community property laws. Our attorneys will always try to help divorcing couples who own a business work out the issue of complex property division outside of court, using dispute resolution methods, but we are also prepared to aggressively represent our clients in court, should a trial become necessary.

California’s Community Property Laws for Business Owners

Under California’s community property division laws, in absence of an agreement saying otherwise, all assets (and debts) a couple acquires in marriage belong to both spouses equally and must therefore be divided 50-50 in divorce. Business ownership is treated as an asset in divorce, and there are a variety of ways to divide a Los Angeles business depending on whether it is considered marital or separate property, or both. If one spouse owned or inherited the business before marriage, it is likely the asset will be considered a mixture of marital and separate property, which is where things can get complicated. In cases where a business owner or high net worth individual enters into a marriage already owning significant separate property and assets, including one or more businesses, a prenuptial or postnuptial agreement may be drafted to protect the individual’s property in the event of a divorce or death, in which case the agreement will dictate how the property should be divided.

Preventative Options

Before you find yourself in a spot where you might lose your business, consider these preventative options.

1. Sign a prenup.If your business existed before you were married, you can designate it as a separate property owned by only you in your prenuptial agreement.
2. Secure an early postnup.This is much like a prenup, except the agreement is signed after the wedding. You can designate your business as a separate property owned by only you. It’s ideal that you sign this postnup before the marriage disintegrates — ideally more than seven years before a breakup. Judges often view postnups skeptically.
3. Place the business in a trust. This will keep the business from being counted as a marital asset as you no longer personally own it. This will also protect the value of the company’s growth.
4. Create a buy-sell agreement. This defines what happens to a business should any owner’s status change, as is the case in a divorce. The agreement might limit a spouse’s ability to acquire ownership, deprive a divorcing spouse of voting rights, or give you or other partners the right to buy at a low, preset price any interest awarded the ex.
5. Have insurance.A whole-life insurance policy that builds cash value can be liquidated to provide the funds to buy out a spouse’s share of the business, if need be.

Understanding How a Divorce Can Affect Business Owners

In most divorces, the division of marital property involves splitting up assets like the family residence, vehicles, bank accounts, debts and retirement accounts. More complex divorce matters in Los Angeles, however, may include the division of other high-value property, including one or more businesses. There are various ways in which the issue of business co-ownership can be handled when doctors, lawyers and other business owners in Los Angeles decide to divorce:

• In one case, the couple may find that they can and still want to continue operating as business partners, which means neither spouse has to relinquish his or her interest in the business, nor will they have to go through the process of having the business appraised.
• If one spouse wants to continue owning and operating the business and the other spouse wants out, the one spouse may choose to buy out the other spouse’s share in the business, which means the business will need to be appraised.
• Both spouses could also decide that they want to sell the business outright when they divorce, in which case the business will have to be appraised, and once sold, the couple will split the proceeds from the sale.
• Different issues are raised altogether for Los Angeles professionals who own or acquire a high-asset business operation prior to getting married, such as doctors and lawyers, and who see the business as separate property not subject to California’s community property laws.

Complex property division is typically a hotly-contested issue among divorcing couples in Los Angeles and complex divorces can take time to resolve, possibly dragging out over a period of months or even years. Full disclosure of the value of the business is imperative in dividing it equally, and business valuation can be a complicated, time-consuming and costly process, especially if it comes down to one spouse being awarded the business and paying the other for his or her community share in the business.

How an Experienced Business Owner Divorce Lawyer Can Help

Divorce is rarely a pleasant process, but for the owners of one or more businesses, it can spell disaster. Some married couples who own a business together manage to be successful in both ventures, but in cases where the marriage deteriorates, and the ownership of the business becomes an asset to be divided in divorce, the divorce process can become extremely complicated and expensive, particularly if the case goes to trial. Selling or dividing a business is no easy undertaking, and the divorce process in Los Angeles can be extremely disruptive for business owners, especially when it comes to determining the value of the business and ensuring that it is split up fairly.

There are also situations in which one spouse may wish to challenge a prenuptial agreement in court. If, for instance, you signed away your right to the business before getting married, but then during the marriage played an important role in the operation of the business, you may have grounds to challenge the agreement in court, in which case having a Los Angeles divorce attorney on your side can significantly improve your chances of achieving a favorable outcome. Our attorneys at Divorce Lawyers Los Angeles understand that no two marriages or divorces are the same, especially when business ownership is a factor in the divorce proceedings, and we can offer legal representation as unique as your personal and professional relationship.

Divorce Lawyers Los Angeles

5455 Wilshire Blvd
21st Floor
Los Angeles, CA 90036

Phone: (213) 550-4600

Web: https://divorcelawyerslosangeles.com

Doctors are in the practice of saving lives. When they can’t save their marriages, the fact that they’re a doctor can make the divorce even more difficult. Why is that? Because often times the practice will be counted as a asset when it comes to property division. This is why, if you are a doctor and you are going through a divorce, you’ll want to contact a divorce and family law attorney that can advise you on the next steps.

Divorcing Doctors

When it comes to property division in divorce, being a doctor can complicate an already complicated situation. According to statistics, one in three married physicians will go through a divorce, which isn’t all that surprising, given the fact that physicians often work long hours and sometimes have to put the needs of their patients before their own or their family’s. there are many factors that contribute to divorce, but among doctors here are some common reasons:

• The inherent demands of the job;
• The emotional work experiences of physicians, particularly those in surgical and psychiatric specialties;
• Marrying before medical school graduation;
• Expressing more anger under stress

Divorces, in general, are often complicated situations, but in the case of a medical doctor with significant property and assets or high net worth, it can be even more so.

Marital Property Division in California Divorces

One of the most important things to consider when filing for divorce is that California is a community property state, which means that all assets and debts acquired during the marriage belong to both spouses equally and must, therefore, be equally divided in divorce, which is why many medical doctors in California insist on a prenuptial or postnuptial agreement. If you are a medical doctor in Los Angeles and you opened your practice after getting married, the financial value of the practice or the increase in the practice’s value during the marriage could be subject to a 50-50 split during your divorce. Even if your practice was already established when you were married, but your spouse gave up a potentially promising career to further your own aspirations or worked in the office at a reduced pay or without any pay, your spouse may be entitled to a share of the practice in divorce.

When it comes to property division, the divorcing couple must do three things: determine whether the property or debt is marital or separate, agree on a value for the marital property, and decide how to divide the marital property equally. The division of marital property in California is final, which is why it’s important that you obtain the best possible result from the outset, and this is where having an experienced family law attorney on your side is immensely helpful.

Medical Practice and Property Division

When a physician gets divorced the value of the medical practice as a financial asset must be determined. These days, most doctors belong to a partnership or group practice. A knowledgeable family law attorney like the ones at Divorce Lawyers Los Angeles will ask the following key questions to get the evaluation process started:

What kind of entity is the group practice?
Was it established before or during the marriage?
How was the practice funded?
Was stock issued to any participants?
Is there a buy/sell agreement for the business?
Is there any future vesting of ownership/stock the participant could be entitled to after the divorce is finalized if the participant acquired such a right during the marriage?

You’ll want to make sure you have all this information because it will affect the valuation of the practice.  Chances are your lawyer will suggest working with an accountant with experience in assessing the value of medical practices specifically. That accountant will examine tangible and financial assets, accounts receivable, office equipment and furniture, the office lease and the overall value of the practice including profitability.

“Goodwill”

The valuation may also include what is known as “goodwill.” Goodwill is considered an intangible asset and means the expectation of continued patronage of the practice, or whether the physician will continue to be able to maintain as well as increase the number of patients. To asses this, many things are considered, including the physician’s age, health, skills, knowledge, reputation and earning power. The length of time the practice has been open, the location of the practice, and the existing patients will all be taken into consideration when determining “goodwill.”

Other liabilities to consider include insurance costs, taxes due, contributions to retirement plans and loans.

Additional Considerations

An accountant will also make sure that the divorcing partner has been receiving his or her fair share of income from the practice and that the amount is equivalent to what the other partners are receiving. You will need to be forthright with your financial information. Any effort to misrepresent your income could be considered fraud. It’s also advised that you notify your partners in practice of the impending divorce. In certain situations the divorce might become their legal problem as well.

A Note:
In many jurisdictions a non-physician cannot own a medical practice or employ a physician. Legally, a spouse who is not a physician cannot, under any circumstances, take over a share of a medical practice. This is important to remember because that means a spouse that is not a physician cannot become an “owner” of the practice as part of a divorce settlement.

Divorcing spouses will need to arrive at a financial settlement based on the value of the practice. If spouses are unable to decide, it will be left up to the court to decide for both parties.

If you are able to, you should include in practice agreements a stipulation that if the marriage of one of the partners or participants is dissolved, all of that member’s stock in the practice is forfeited. (It may be possible for the doctor in the divorce to buy back into the practice once the divorce is completed.

Additional Legal Mistakes

It’s essential that if you are a doctor and you are facing divorce that you choose an attorney with substantial experience in the process. Some of the most costly legal mistakes doctors make in a divorce include:

• Hiring an inexperienced attorney
• Failing to disclose damaging personal and/or business information to their attorney
• Failing to insist on a confidentiality agreement to protect their patient list and other confidential information related to the practice
• Understating or overstating the value of their medical practice
• Disregarding important deadlines and requests for information
• Never having had an active role in the care of their children
• Failing to consider tax consequences
• Failing to make a complete inventory of assets and debts

Working with a lawyer that is skilled with not only physician involved divorces, but also skilled with high-net-worth divorces is crucial to having the best result in your divorce.

Understanding What Divorce Means for You

Divorce is often complicated and messy, and even in situations where both spouses agree to dissolve the marriage, a divorce is not always a straightforward resolution, especially for medical doctors. A divorce can have serious consequences on your children, friends and relatives, and if you own your own medical practice, on your employees and on the practice itself. Many physicians in Los Angeles have toiled for years and sacrificed a great deal in other parts of their lives to build successful medical practices. What they don’t realize is that, in the event of a divorce, if their spouse claims the practice as marital property and demands payment of cash or other assets, their practice could be at stake.

There are also the issues of spousal support, or alimony, and child support to consider, both of which you may be ordered to pay if you get a divorce and you are the higher-earning spouse and/or if your children live with your spouse the majority of the time. During divorce proceedings, the court can decide which spouse gets custody of the children (if the couple has children together), what amount of child support or alimony will be paid, and how to divide the marital property. It’s also important to note that California is a no-fault divorce state, which means proof of misconduct has no bearing on the judge’s decision to grant a divorce, though it may be relevant to other decisions, including the calculation of spousal support.

How an Experienced Medical Doctor Divorce Lawyer Can Help

Going through a divorce can be complicated, stressful and exhausting, and many times, couples will disagree on how their property should be divided, which can cause the divorce proceedings to drag on longer than anticipated. Because so many different issues can arise from a divorce filing, it’s important that you have a knowledgeable California family law attorney on your side who has a proven track record in Los Angeles divorce cases. Simply put, an attorney with experience representing medical doctors in Los Angeles divorce proceedings can make the divorce process significantly easier on you and your family. Our attorneys at Divorce Lawyers Los Angeles are committed to protecting your rights under California law and will work tirelessly to minimize the emotional and financial consequences of a divorce and help you obtain a fair settlement in your case.

Free Medical Doctor Divorce Consultation in Los Angeles

One of the most contentious legal issues arising from Los Angeles divorce proceedings is the division of property and assets, and this is especially true for medical doctors with a high net worth. The adverse consequences of a divorce can have an effect on the rest of your life, and as in other areas of family law practice, the first step towards success in a medical doctor divorce case is hiring the right attorney to represent your best interests. If you are considering filing for divorce in Los Angeles, or if you have been served divorce papers by your spouse, and one of you is a medical doctor, contact Divorce Lawyers Los Angeles today at (213) 550-4600 for a free initial consultation.

Divorce Lawyers Los Angeles

5455 Wilshire Blvd
21st Floor
Los Angeles, CA 90036

Phone: (213) 550-4600

Web: https://divorcelawyerslosangeles.com