When Milwaukee couples come to a mutual decision to divorce, they might also expect to be able to reach negotiations regarding child custody and property settlements with little interference from a third party. However, when complex issues and high assets are at the center of discussion, negotiations often become very complicated.
One small business owner discovered how complex the divorce process can be after he failed to take precautionary measures before marriage to protect his firm in the event of a divorce. As a result, it took more than a year before the man and his ex-wife were able to reach a divorce settlement, and the process nearly destroyed his business.
The business owner commented that his divorce was “painful” and “costly” for many reasons. In states such as Wisconsin, a small business may be considered marital property. If this is the case, business owners risk dissolving the business by splitting the interest with a spouse, or one spouse could buy the other out. The business owner commented that so much time was spent on retaining his business in the divorce that he lost focus on his consulting firm.
In fact, he believes that his consulting firm lost more than $200,000 in potential business. Fortunately, the man was able to retain his business in the divorce and he eventually turned the company around. However, many attorneys who deal with high asset divorce cases commented that without taking certain measures to protect one’s business in the event of a failed marriage, individuals could see their businesses go under as well.
In order to prevent one from losing his or her small business because of divorce, individuals have several legal options that they can explore. Before marriage, business owners may want to consider preparing a prenuptial agreement to detail what should be considered marital assets or what each spouse agrees to be entitled to if they ever divorce.
Another option is to prepare a buy/sell agreement which helps owners create a plan regarding what should happen to their business and how ownership should be determined in the event of certain triggering circumstances such as a divorce.
Although Milwaukee couples may understand that their marriages cannot be saved, they can take precautionary measures to ensure that they don’t risk losing their business as well.
Source: Reuters, “Divorce has “immense” impact on small businesses,” Deborah L. Cohen, Sept. 28, 2011
Keeping your small business intact when your marriage dissolves
When Milwaukee couples come to a mutual decision to divorce, they might also expect to be able to reach negotiations regarding child custody and property settlements with little interference from a third party. However, when complex issues and high assets are at the center of discussion, negotiations often become very complicated.
One small business owner discovered how complex the divorce process can be after he failed to take precautionary measures before marriage to protect his firm in the event of a divorce. As a result, it took more than a year before the man and his ex-wife were able to reach a divorce settlement, and the process nearly destroyed his business.
The business owner commented that his divorce was “painful” and “costly” for many reasons. In states such as Wisconsin, a small business may be considered marital property. If this is the case, business owners risk dissolving the business by splitting the interest with a spouse, or one spouse could buy the other out. The business owner commented that so much time was spent on retaining his business in the divorce that he lost focus on his consulting firm.
In fact, he believes that his consulting firm lost more than $200,000 in potential business. Fortunately, the man was able to retain his business in the divorce and he eventually turned the company around. However, many attorneys who deal with high asset divorce cases commented that without taking certain measures to protect one’s business in the event of a failed marriage, individuals could see their businesses go under as well.
In order to prevent one from losing his or her small business because of divorce, individuals have several legal options that they can explore. Before marriage, business owners may want to consider preparing a prenuptial agreement to detail what should be considered marital assets or what each spouse agrees to be entitled to if they ever divorce.
Another option is to prepare a buy/sell agreement which helps owners create a plan regarding what should happen to their business and how ownership should be determined in the event of certain triggering circumstances such as a divorce.
Although Milwaukee couples may understand that their marriages cannot be saved, they can take precautionary measures to ensure that they don’t risk losing their business as well.
Source: Reuters, “Divorce has “immense” impact on small businesses,” Deborah L. Cohen, Sept. 28, 2011
Danica Patrick announces divorce on Facebook
Celebrity NASCAR driver Danica Patrick recently announced on Facebook that she was divorcing her husband of seven years. While she said in her announcement that the split was amicable, Patrick — the most successful woman in American racing history — could still potentially face many of the challenges typical of a high asset divorce.
One issue frequently arising in high asset divorces is whether one spouse should be awarded spousal maintenance — generally known as alimony — from the other. Spousal support is designed to provide a non-working or under-employed spouse with assistance until that person becomes self-supporting. It often is a hotly contested issue in divorces, especially if one spouse earns a significant income. In Wisconsin, there are no set black and white rules to determine if, when, or how much spousal maintenance will be awarded. Courts will examine a number of factors when coming to a decision.
Another issue in high asset divorces is property division. In Wisconsin, the marital estate includes property that either spouse acquires during the marriage, with exceptions for gifts and inheritances. In most cases, the court divides the marital estate equally between the parties. In a high asset divorce, it is important to get comprehensive valuations of all marital property to ensure equitable division.
Patrick likely has a team of legal advisers who will help her work through these issues. Many people going through divorce might benefit from an experienced divorce attorney who can assist with these complicated legal issues.
Source: Associated Press, “Danica Patrick divorcing husband after 7 years,” Jenna Fryer, Nov. 20, 2012
Don’t forget about IRS when deciding divorce agreement
The IRS has some very interesting rules when it comes to reporting the income and assets of divorcing couples. To make it even more complicated, those rules are different in community property states like Wisconsin.
The first thing to know before you check the “married” or “single” box on your tax return is that the IRS wants to know what your marriage status was on Dec. 31. If your divorce became final on Jan. 1, you must check the married box. If you live in Wisconsin, the state treats both incomes as community property and you may have to include part of your spouse’s income as your own for the part of the year you were still married.
You and your ex-spouse must also decide who is going to claim head of household – and take advantage of the greater deductions – for the part of the year that you were married. Generally speaking, if you paid for more than half of the housing costs for the year, and/or lived on your own for more than six months, and/or the children lived with you for more than six months, you can claim head of household.
You must also decide who is going to claim the tax write-off for the children. Usually the parent with whom the children live with the majority of the time will take the write-off. If there is shared parenting time and joint custody, some couples take turns claiming the children every other year.
Keep in mind when determining and agreeing to alimony and child support payments that alimony is deductible by the payer and must be claimed as income by the payee. Child support is neither of those things so you must be careful how you describe certain payments in the divorce decree.
When dividing assets and property, the IRS can hit you unexpectedly. If you are awarded part of your former spouse’s retirement account or 401(k) it’s a good idea to roll over that money into a retirement account of your own so you do not have to pay penalties or fees on that money.
To avoid paying capital gains or losses on a property transfer you must complete the deal within a year of the divorce date unless the event is specifically detailed in the divorce agreement. In that which case you have up to six years for any property transfers.
Source: dailyfinance.com, “Don’t Let Divorce Destroy You at Tax Time,” Dan Caplinger, July 23, 2012
Parents sometimes use children as pawns in disagreements
Many of the decisions and protocol parents need to follow regarding their children are addressed in the divorce decree and child custody/support orders. But there are certainly some events that no one can prepare for. Anger, bitterness, pride and different belief systems often get in the way of sound decisions when divorced parents have arguments about what is best for their children.
Such is the case of a 4-year-old girl that made national news recently when her father did not allow her to accept a trip to Disney World from the Make-A-Wish Foundation. She recently completed her chemotherapy treatments for leukemia that she’s been fighting for the last two years. The Foundation granted her wish to take her Mom, sister and grandparents with her to the Magic Kingdom. But, she needed signed permission from both her parents, and her father refused.
The girl’s mother feels that her father was retaliating because he was only recently granted visitation rights to see his daughter earlier this year. She felt he was using this occurrence as a way to get back at the mother.
He argued that only children who were terminally ill and only had six months left to live should be awarded grants for the foundation. His daughter was declared cancer free. He was also embittered because neither he nor the girl’s other siblings were invited to participate in the trip.
The Foundation argued that it does not focus on terminally-ill children, but provides hope and strength to youngsters undergoing difficult medical procedures.
In the end, the little girl’s maternal family raised enough money for the trip by placing jars at local Haskins businesses and with donations that poured in from around the country through an online account.
Our firm can help you resolved conflicts like the one discussed in this article. Learn more by visiting our Milwaukee, Wisconsin, Family Law web page.
Source: Toledoblade.com, “Help goes national as cancer survivor, 4, will get her wish,” Mel Flanagan, July 20, 2012
Milwaukee woman entitled to interest from ex-husband’s benefits
A Wisconsin court recently decided that the ex-wife of a former Milwaukee fireman is entitled to 40 percent of his retirement pension beginning in 2001. The couple divorced after 24 years of marriage back in 1993. During that time, they worked with family law attorneys to draft a marriage settlement agreement. The agreement determined that the ex-wife would receive 40 percent of her former husband’s pension that he would begin to receive in 2001 when he turned 57.
Instead of receiving his pension in 2001 as planned, the fireman decided to join litigation concerning the duty disability benefits he had been receiving since 1985. The results of the litigation determined that the fireman would receive nontaxable disability benefits for life instead of the pension. He did not inform his ex-wife that he decided to take the disability option instead of the pension. When his wife learned through a family friend of this decision in 2009, she assumed that he had done this hoping that she would receive not receive any spousal support because of his decision.
The ex-wife decided to dispute her ex-husband’s decision, and a circuit court ruled in her favor. The former firefighter was ordered to pay his ex-wife the past-due payments that she should have received back in 2001 plus 3 percent interest. Her ex-husband was ordered to pay more than $160,000. The court also ruled that if he did not pay the past-due amount within one month and two weeks from the judgement, he would have to pay 12 percent interest on the amount owed. The ex-husband tried to appeal the decision, but the appeals court upheld the circuit court’s decision. Family law attorneys can be valuable advocates for people struggling with family law issues.
Source: State Bar of Wisconsin, “Court Sides With Ex-Wife in Pension Fight, Applies New Judgment Interest Rule,” Joe Forward, Sept. 13, 2012
‘Grand families’ face unique legal issues
Society’s view of the “traditional” family — that is, father, mother, children — is of course a hot topic these days in family law, especially in wake of more and more states legalizing same-sex marriages. But another type of nontraditional family is often overlooked: the so-called grand family.
More and more children these days are being raised by their grandparents; in fact, this is the fastest-growing type of family in the United States. In Wisconsin, more than 70,000 children live in homes where the primary person in charge of the child’s well-being is one or both of the grandparents.
The reasons behind the increase of grand families are many and include everything from parental incarceration, drug abuse and divorce. Often, an endangered child’s biological grandparents will step in and adopt the child in lieu of getting protective services involved or dealing with a foster family. Besides the usual day-to-day challenges of parenting, grandparents may also face unexpected legal issues when it comes to their status as caregivers, which can also affect their grandchildren.
The law depends on family classification more than most people would assume. Grandparents who find themselves raising their grandchildren face a potential storm of legal issues. Family attorneys can work to prevent these legal problems from happening in the first place. For families, planning is one of the best ways to protect against future unforeseen circumstances.
For example, grandparents can use family attorneys to ensure that their grandchildren are legally tied to them and that this has occurred through the correct legal channels. Dealing with the challenges of parenthood is stressful enough, but having to worry about what might happen to your child just because the law doesn’t technically recognize your unique family can be staggering. A simple consultation with a family attorney could save hours and hours of emotional and financial headaches later on.
Source: Green Bay Press Gazette, “‘Grand families’ support group starting,” Sept. 27, 2012
Wisconsin domestic partnership law upheld
The Wisconsin domestic partnership law has survived a constitutional challenge, at least for now. The law, passed in 2009, allows same-sex couples who share the same residence to register as domestic partners. Shortly after the law took effect, Family Action Wisconsin filed a lawsuit seeking to have domestic partnerships declared unconstitutional. The group argued the law violated a 2006 Wisconsin constitutional amendment that declares marriage in the state to be between one man and one woman. The amendment denies state recognition of any legal status that purports to confer rights and benefits substantially similar to marriage.
Defendants in the lawsuit, who include a former Wisconsin governor, argued the domestic partnership law did not grant substantially similar rights. They pointed to 33 specific differences between domestic partnerships and marriage, including differences in how domestic partnerships are treated under existing family law. For example, the law makes no provision for property division when a same-sex partnership ends. The Wisconsin Court of Appeals agreed with the defendants. The plaintiffs have vowed to appeal to the state’s Supreme Court.
While registered domestic partners in Wisconsin do not have all the rights of married couples, there are some benefits. Registering as a domestic partnership allows a couple to own property as joint tenants, inherit property through the laws of intestacy, and take leave under the state’s Family and Medical Leave Act when one partner is ill.
Because domestic partners are not treated the same as married couples, individuals wishing to register a domestic partnership are advised to consult with a knowledgeable family law attorney first. The attorney can help by drafting a domestic partnership agreement to address issues not covered by the law, like how property division will be handled if the relationship ends.
Source: State Bar of Wisconsin, “Wisconsin’s Domestic Partnership Law Survives Constitutional Challenge,” Joe Forward, Jan. 2, 2013
Why you need to know about your spouse’s business
Income is a key consideration in any divorce. Under Wisconsin law, both spouses’ incomes are factored into determining how much spousal maintenance or child support one spouse may be required to pay as it is a community property state wherein assets are divided equally. Substantial changes in income may warrant a post-divorce modification in alimony or child support. Given the key role income plays in family law considerations, it is important that anyone going through divorce has a good handle on what his or her spouse earns.
In most cases, a spouse’s income may be ascertained and easily determined by looking at W-2s and pay stubs. Determining income becomes trickier if the spouse is self-employed. When a spouse runs a home cleaning or maintenance business, a lawn service company, or even a bar or restaurant, much of the income will come in the form of cash, which is easily hidden and can be used to purchase a new luxury vehicle, a golf-course condo and other high-end items that significantly increase one’s net worth without ever making its way onto an income statement.
When a spouse runs a cash-based business, questions are likely to arise during divorce about how accurately the income has been reported. If one spouse knows the other spouse had underreported income in the past, there may be a presumption that current income also is being understated. If the other spouse does not have an adequate understanding of how the business operates and where to find the cash flows, the missing income may be hard to track. Options to locate income discrepancies during divorce include a lifestyle analysis tool and a forensic accountant.
An experienced family law attorney can help ensure that all income be accounted for during a divorce, and he or she may also assist in assembling a team of financial experts to track down hidden cash.
Source: Forbes, “What A Divorcing Woman Needs To Know About Her Husband’s Cash-Based Business,” Jeff Landers, Jan. 30, 2013
Spouse may be entitled to keep life insurance
When couples divide property in the process of negotiating a divorce settlement, they may find that one or the other has a life insurance policy with no cash value. In cases in which the family law judge has ordered the couple to divide everything equally, it is often difficult to determine the true value of a life insurance policy.
In most cases, the owner of the policy is the person who pays the premiums. That person can designate any beneficiary he or she chooses. For example, if a husband has a policy on his own life and pays the premiums, he may designate one of his children or a subsequent spouse as the beneficiary, leaving the former wife with no proceeds from the policy.
In these cases, it is sometimes best for the partner who needs the life insurance proceeds to take over payments on the policy and name himself or herself as the beneficiary. If the owner agrees, this is an easy transfer in most cases. In other cases, such as when a former spouse is responsible for child support, the custodial parent may wish to have a life insurance policy on the paying spouse in case of his or her sudden death.
A family law attorney may be able to assist partners in making life insurance and other financial decisions pursuant to a divorce action. An individual facing divorce must make many decisions and some of them are about division of property. Obtaining a fair and equitable distribution of property is the most important goal for any couple who want to retain their financial independence and exit the divorce in the best possible financial position.
Source: Fox Business, “Don“, Jack Hungelmann, May 06, 2013
Ways to improve communication with your ex
Newly divorced people in Wisconsin might be frustrated at having to keep up communication with their exes after they have dissolved their marriage. After all, that is part of the reason why some people choose to get a divorce, because they don’t want to be together anymore. However, if there are children or other affairs involved, it is sometimes necessary to try to communicate for the sake of the circumstances.
There are various ways that people can deal with communicating with their exes. Some of the biggest disputes in family law may be caused by lack of communication. Some Huffington Post divorce experts state that there are three ways to communicate better with exes. The first way is for people to change their situations. They can approach their ex as if they were a stranger and be pleasant to them in the same manner they would a cashier at the supermarket.
Another approach people can take is to eliminate their situations. They can choose to cut off all direct or verbal communication with their exes. They could choose to only communicate about important issues like visitation, school and activities and they could do so through text, email or through their attorneys if they don’t feel they can emotionally communicate directly with their ex just yet.
Another way that people can communicate better with their exes is to simply accept the situation for what it is. They can accept that their ex may not change, learn how to ignore any snide remarks, sarcasm and bad behavior. Acceptance may make dealing with the situation easier for everyone involved. Family law attorneys might be able to assist people who are going through divorces communicate with their exes. They might also be able to help them come to an agreeable divorce settlement.
Source: Huffington Post, “3 Ways to Communicate Better With Your Ex“, Honoree Corder, August 02, 2013