Protecting Your Business from Your Future Ex-Spouse
When couples says “I do” one must be thoughtful of the potential consequences to a Small Business owner. A Small Business owner without proper preparation and/or knowledge may soon be saying “our assets” instead of “my assets”. Small Business owners should closely examine their fiduciary duties to their spouse in reference to community assets that may arise when two individuals acquire a marriage license and marry or marry by common law. A small business owner can protect his/her premarital property by keeping it under their control rather than risking community characterization.
Pre-Nuptial agreements are binding technical contracts that safe-guard an individual’s properties, monies, and business belongings in detail. These contracts may be specific, complex, and meticulous. An attorney should be consulted. The Pre-Nuptial agreement can dictate, regulate or mitigate manage next of:
- The entitlements of spousal support
- The inheritance regarding Insurance Policies
- The specific allocation of resources and properties in a Will, Trust, or Business
- The marital property claims in reference to both parties
- The ability to Own, Sell, Purchase, Rent, Mortgage, and Regulate any Separate or Community Properties
If an individual has married before a Pre-Nuptial contract is executed there is still hope and a path to take in order to insure protection of your small business. A Post-Nuptial agreement protects a Small Business owner’s property after the fact and should be utilized if required or desired. The Post-Nuptial agreement is similar to the Pre-Nuptial agreement but more care and specificity is required since some or all an individual’s assets may have taken on the attributes of community property because of the spouse’s inherent property rights after the marriage has taken place.
There are three major Ante-Nuptial agreements:
1.) Partition and Exchange Agreement: This Agreement regulates the financial allocation of a Small Business allowing monies and stock to remain separate property rather than becoming community property over time. It also separates and characterizes each spouse’s future income. The agreement allows Small Business owner’s the ability to have independent control over their business without empowering or including their spouse in decision making or management.
2.) Agreement Concerning Income from Separate Property: The principal feature of this agreement is to protect an individual’s corpus & income that exists or is produced by their Small Business. Even If there is an existing Post-Nuptial agreement that inhibits a spouse from attaining stocks or money within a specific Small Business, the actual income the Small Business produces may become community and the other spouse is entitled to their share upon dissolution of the marriage. This is tricky, for a Small Business owner is right in believing that the property and assets of the business itself is independently theirs, but he/she is wrong in the assumption that the profit made by their business is independently theirs as well. This Agreement allows a Business Owner to control, manage, and personally own all the income that is realized through his/her company. This Agreement must be signed by the owner and his/her spouse and should be as concrete as possible to avoid problems in any type of litigation process.
3.) Complex Estate Planning: Estate planning is helpful and smart. Many Post-Nuptial agreements allow independent properties to modify the community status of property to attain certain tax breaks that are applied to married couples. This may put a smile on a Small Business owner’s face for a while as he/she reaps the benefits of tax-deductions, but if a divorce occurs these tax exemptions could become proof of the existence of community property to be awarded to his/her spouse. Pre and post marital agreements may not be necessary dependent on specific situations, but if they are necessary the agreements will ensure the control of one’s business assets, income, and properties. The law was created to help ensure the protection of people’s premarital rights. If you are a Small Business owner read up on yours rights and avoid not being taken advantage of by a once loving spouse in the future.
Over 50+ Years Old and Headed into A GRAY DIVORCE?
There has been an overall decrease in the United States divorce rate since 1990, but the divorce over age 50 has doubled! “One out of three boomers will face old age unmarried” says the National Center for Family & Marriage Research at Bowling Green State University.
What are the main reasons for “The Gray Divorce Revolution”? 1. Lack of communication between spouses, 2. Financial hardships affecting a couple, 3. Empty nests and the lack of “stay together for the family” and 4. Lack of commitment to the marriage with less social stigma about splitting up and divorce.
In today’s economy, Baby Boomers are very vulnerable financially. In divorce assets are split leaving each spouse with less time and existing assets or funds necessary to recover from financial losses, existing debt and funds to secure retirement.
A very disturbing fact: the Employee Benefit Research Institute Retirement Confidence Survey states that more than half of all workers and their spouses have less than $25,000 in household savings and investments.
What are the main areas in which “The Gray Divorce” couples are looking at financial challenges in their new single state?
Retirement-Saving for retirement is not what it used to be. Most couples usually split up their retirement fund, but in a declining economy saved funds have been hard hit and there is insufficient money to retire in their current or accustomed lifestyle. Many divorced people are now postponing retirement by remaining in or trying to return to the workforce. It can be very difficult to re-enter the workforce with a much lower paying job as your only choice.
Social Security- If you are over 62, were married over 10 years to your former spouse and are currently unmarried and not entitled to receive a higher benefit based on your own work, you can receive benefits based on your ex’s earnings even if your former spouse has remarried.
The longer you can wait to collect divorced spousal benefits, preferably up to your full retirement age, the higher your benefits will be.
Make sure you obtain a copy of your spouse’s most recent Social Security statement when divorcing to have an idea what your benefits will be at retirement.
Housing– Breaking up the household and marital assets is usually the most emotionally draining part of any divorce. Who gets the house? A better question maybe who can afford the House? Many couples are very emotionally drawn to keeping their home even though it could be the difference between supporting a more streamlined lifestyle or a potential bankruptcy! Think with your brain and not your heart. You are starting a new phase in your life. What will make you secure and is truly affordable in your new financial situation?
Marital Debt– Debts incurred jointly in a marriage will remain the obligation of both parties after the divorce from the creditor’s position. If your former spouse is responsible for a debt but doesn’t pay it your credit can be severely damaged. If a debt was legally incurred exclusively by an individual spouse during a marriage in most cases it will be the responsibility of that individual. Make sure all joint credit cards are cancelled immediately and start building your own credit.
It is very important in “a gray divorce” that these debts are dealt with in a timely fashion since most spouses will soon be on a fixed income and may not be able to afford the financial stress of these liabilities.
Health Insurance– This is one of the most perplexing problems that ex-spouses face between the ages of 55-65 years old. If both spouses work and have separate health insurance policies there is not a problem. But if one spouse is self-employed or unemployed this could be a very big issue. COBRA insurance is usually available through your ex- spouse employer for 36 months after a divorce. This is usually a viable option but it is a more expensive option and you should move to an individual health insurance policy as soon as you are able.
“A Gray Divorce” is a very sobering experience for older Americans. Many will never be able to recuperate from the financial ramifications of the divorce. Don’t kid yourself. Your financial situation has definitely changed. Reevaluate your financial portfolio and start cutting your expenses!
Nacol Law Firm P.C.
Dallas Divorce Attorneys, Mark Nacol and Julian Nacol
Call (972) 690- 3333
‘Tis the Season of Married Couples Divorce Uncertainty? Divorce Warning Signs
As the holiday season approaches and all should be merry and bright, the black clouds are starting to gather for many married couples and families. January is always one of the top months for divorce filings since many people want to change their personal life situations with the start of the New Year.
Instead of receiving a knock on the door in January from a process server with your divorce summons, here are some Divorce Warning Behavior Signals to look for in your spouse that should not be Ignored. In the Nacol Law Firm’s Family Law Practice, I have placed the warning signals by priority from “something is changing” to “we are in serious trouble”:
- Do you have a ”gut feeling” that there is a “defensive aura” between you and your spouse? The marriage is not going well, and your spouse is wanting to end the marriage.
- Has your spouse changed “their look and appearance” in relationship to you or other people? New clothes, new look, new friend? Maybe starting to detach mentally from your marriage?
- Possibly one spouse is now “very busy” and preoccupied with work, texting, private telephone calls with friends and long disappearing shopping excursions with unavailable contact. Maybe Someone does not want to be found?
- You and your spouse are now in a serious stage of “Anger” and fight with each other constantly. Maybe a sign of divorce being a real option?
- Suddenly there is no fighting, no communication, and no caring between the partners in this marriage. Does anyone care anymore about the future of divorce for this marriage?
- Money issues seem to start happening with changes in Bank amounts dwindling or new accounts being opened. Credit/debit card amounts are rising as if someone is planning to embark on a new life after a divorce!
If you are seeing two or more of these situations happening in your marriage, there may still be time to save this marriage. Start with meeting in a non-threatening location to talk about agreeing on making some major decisions on staying married or getting a divorce. If this is not possible in your current situation, suggest visiting with an agreed upon marriage counselor and try to work out serious problems in your marriage. It is always worth a try for both of you and your family to try and save the marriage.
Many times, one or both spouses are done with “us” and now want to be “me”. If saving a marriage is totally impossible, then look for a knowledgeable family law attorney who can help you get through this terrible yet sometimes necessary experience.
Nacol Law Firm P.C.
Dallas Family Law Attorneys
(972) 690-3333
Walnut Glen Tower
8144 Walnut Hill Lane
Dallas, Texas 75231
Oral Contracts in Texas : Enforceable Contracts in Texas
You may hear that an oral agreement is just as valid as a written agreement. However, in a Texas court of law, a written contract ordinarily trumps an oral contract. This means that in disputes, should there be a disagreement on a provision of the contract, the Court will use the written provisions of the contract to interpret the meaning before it will consider the oral arguments. Further, typewritten provisions control over printed provisions.
Under Texas law, the requirements for a valid contract are: (1) an offer; (2) an acceptance in strict compliance with the terms of the offer; (3) a meeting of the minds “meeting of the minds” is actually subpart of offer and accepted elements, not an independent element; (4) each party’s consent to the terms; (5) consideration; and (6) execution and delivery of the contract with the intent that it be mutual and binding. The elements of written and oral contracts are the same, and they all must be present in order for the contract to be binding.
Do you have an oral contracts with business vendors or employees that you would like to discuss with a Dallas contract attorney? Call Dallas contract attorney Mark Nacol to discuss any questions you may have on oral contracts in the Dallas, Texas area.
Temporary Restraining Order in Texas – What a TRO Does
A temporary restraining order, commonly known as a “TRO” is used in family law to place injunctions without a full hearing on one or both parties. These injunctions prohibit specific actions that could endanger or prove damaging to the property in a divorce or the children of a divorce. You should have an idea on what the process entails.
A TRO is governed by Texas Rules of Civil Procedure Rule 680 and Texas Family Code § 6.501. If your spouse wishes to file a TRO that immediately excludes you from possession of or access to your children, a notice of this hearing must be given to you prior to the court date. The only exception to this is an Ex-Parte meeting with the judge, which means that only your spouse or her attorney will be present at the preliminary hearing. The judge may order a TRO Ex-Parte only if the TRO clearly demonstrates from specific facts shown by affidavit or by a verified complaint that immediate and irreparable injury, loss, or damage will result to the applicant or children before notice can be served and an actual hearing.
If you are on the receiving end of TRO and it prohibits you from access to your children, there are some things to keep in mind.
First: a TRO has a time limit, which is 14 days. After 14 days the TRO may be extended by a judge only once for an additional 14 days. Thus at most this TRO may only last 28 days’ absent agreement to an additional extension. A Judge does have the discretion to extend the TRO more than once if it is uncontested (you do nothing or do not appear).
Second: A TRO is NOT a Protective Order. This means that the police cannot kick you out of your house or forcibly arrest you for violating a TRO, absent any related criminal conduct. There are consequences for violating the TRO but not criminal consequence. You may be found in contempt of court by the Judge who ordered the TRO and forced to pay fines or be held to more severe sanctions. Violations will not be good for your case if you intentionally violate.
Third: A TRO must have a signed and notarized Affidavit or a verified pleading attached to the motion. If the opposing counsel did not follow these procedures the order may upon motion to dissolve be found void due to violation of the Texas Rules of Civil Procedure.
Fourth: You cannot practically appeal a TRO because it may only last for at most 28 days, if contested. Once you are served with the Ex-Parte TRO, you may request a motion to modify or dissolve the TRO after giving your spouse 48-hour notice and seek attorney fees if the filing was false or frivolous.
TRO’s are civil injunctions that are usually given without notice only if immediate and irreparable injury, loss, or damage will happen. The proof rules are more relaxed in Family Law Cases. Specific TRO procedures can differ in all counties and in different courts so make sure the check online the rules of each specific jurisdiction.
TRO’s only last 14 days and cannot be enforced by police officers, absent related criminal activity. Do not be distressed if you are served a TRO one day while you are battling your spouse for child custody or property. Take a deep breath call your attorney and set a hearing to modify, vacate or dissolve the TRO.
Many counties have standing orders that issue and are effective as to both parties upon the filing of a Family Law Proceeding. Read such mandatory orders before you file your case.
NACOL LAW FIRM P.C.
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Dallas, Texas 75231
972-690-3333
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Attorney Mark A. Nacol is board certified in Civil Trial Law by the Texas Board of Legal Specialization
