...

What do small business owners Need to Know About Alimony?

Alimony is a subject that comes up in many discussions about divorce. However, the subject of alimony is slightly more complicated in Texas where there are two different types of post-divorce spousal support. To begin today’s blog post from the Law Office of Bryan Fagan we are going to discuss what those two different types of support are. Next, we will get into what you as a small business owner should be aware of as the subject pertains to you and your family.

The two types of post-divorce spousal support in Texas

The term alimony is utilized frequently to refer generally to money paid by one spouse to another after a divorce to provide for the receiving spouse’s financial well-being. In Texas, there are two types that you need to be aware of. Neither are those types are called alimony. The two different types are contractual alimony and spousal maintenance. Here is a little bit more about each of those subjects.

Contractual alimony would be negotiated upon by you and your spouse in settlement negotiations before a trial. There are no specific limitations on contractual alimony and as far as the amount that can be paid or for the duration it can be paid to you. This is since contractual alimony is not governed by the Texas family code but rather by Texas contract law. This can be a double-edged sword for you. On the one hand, he may be able to receive contractual alimony for longer and for more money than you would special maintenance. Additionally, since there are eligibility invitations on special maintenance you may qualify for contractual alimony so long as you were able to negotiate for it with your spouse.

on the other hand, contractual alimony has limitations that you should be aware of the period since it is governed by contract law rather than family law provisions then a family court can only enforce contractual alimony to the extent that it would have been able to do so under the Texas family code. Therefore, if you have negotiated for more contractual alimony than you would have been able to receive under the spousal maintenance provisions of the Texas family code you will be limited as far as the options available to you in an enforcement case.

As I mentioned, contractual alimony is something that is negotiated by you and your spouse. Frequently negotiations for contractual alimony occur either in informal settlement negotiations with your spouse or in mediation. If you can present a straightforward case to your spouse about why post-divorce support is necessary, then you stand a good chance of being able to negotiate that with him or her. The requirements to receive spousal maintenance are relatively many periods, on the other hand, there are no specific requirements that either would allow you to receive or would prevent you from being awarded contractual alimony. The most important factor in this discussion is your relationship with your spouse.

Spousal maintenance can only be awarded by a family court judge in a trial. You would do this by showing the family court judge that your monthly financial responsibilities go beyond the financial resources that you have available to you. This includes your income from your job as well as the division of Community property in your case. Also, the amount of separate property in your divorce will factor into this discussion as well. If you are awarded spousal maintenance, then you should be aware of the requirements that needed to be in place for it to be awarded as well as how it can be rescinded in the future.

Factors to consider when asking for spousal maintenance in a Texas divorce case

not every person reading this blog post will be eligible for spousal maintenance in their divorce. Rather, you need to be familiar with the factors that a family court judge will look to award your maintenance payments. The first factor that a family court judge would look to when considering an award of spousal maintenance is the length of your marriage. in most cases comma you and your spouse need two have been married for at least 10 years to receive an award for vessel maintenance. However, marriages that our under 10 years in length are also eligible for spousal maintenance if you have been a victim of domestic violence within the past two years before your divorce begins. The length of spousal maintenance can last from 5 to 10 years depending on the specific length of your marriage.

Even if your marriage is at least 10 years in length then that doesn’t necessarily mean that you will automatically be awarded special maintenance when you ask for it in a divorce. Rather, you must show that your minimum basic needs cannot be met with the number of resources available to you after your divorce. Minimum basic needs do not equal living any sort of specific lifestyle after your divorce. It does not mean that your children will be able to continue going to the same school where they attended during your marriage or that you will be able to wear the same clothes or eat the same food. Spousal maintenance is intended to help you meet the basic requirements of your four walls as well as to be able to provide for your family.

next, if you are not currently working you must have displayed a willingness to look for employment or complete an educational benchmark to find suitable employment after the divorce. If you were not working during the divorce and showed no willingness to try to look for work, then it is very unlikely that a family court judge will award you any type of spousal maintenance. Many times, this may look like trying to find full-time work if you were only working part-time or if you have a college education that was nearly complete it would be a good idea to show a family court judge that you have attempted to enroll in school any word to complete that degree or vocational training.

Whatever the circumstances of your case maybe understand that it is important for the need to know the different factors at hand that may play into a decision by a family court judge whether toward your spousal maintenance. In many cases, the difference between being awarded special maintenance and not receiving that award it could mean being able to afford your rent or being able to do many of the things that we find to be necessary for life. It is not a subject that you should take lightly or not be prepared for. Also, assuming that you are going to be awarded spousal maintenance simply because you have been married for at least 10 years would be a mistake.

Rather, I would recommend that you work with one of the experienced family law attorneys with the Law Office of Bryan Fagan when it comes to the specifics of your case. Our attorneys have the experience that we need to be able to learn more about the planning process for a divorce and how the judge may view your circumstances when it comes to potentially awarding social maintenance. Consultation with our experienced lawyers is free of charge and can be had at our three Houston area locations, over the phone, or via video. We are here to serve you and to help provide you with information while you are beginning your journey through a divorce case.

Building a business and paying contractual alimony or spousal maintenance

One of the major concerns that many small business owners have about a divorce case is that all of their hard work and building the business will be thrown out the window due to the financial constraints and challenges presented by a divorce case. For those of you who are entrepreneurs, self-employed, or otherwise own a small business it can be a daunting thought to have to overcome not only the challenges of the marketplace but also the challenges presented by divorce. You may have legitimate questions and concerns about how you will be able to rebuild a business or focus enough time on your business during the divorce to allow the divorce to be successful along with your business. Threading that needle is one of the great challenges of a divorce case. I’ll add that having an attorney who understands these challenges and we’ll work with you tirelessly is a major advantage.

The unfortunate reality is that many times the people who make the best entrepreneurs and businesspeople are oftentimes not as adept at building lasting marriages. You may have all the desire in the world to build a long-lasting marriage that could stand the test of time however, the realities of your work commitments can put you in a position where it is difficult for you to place enough attention on your marriage while simultaneously operating your business. The long hours and time away from home can severely limit how successful you can be in maintaining relationships. In many cases, you may also be a position where a lot of your household income went into building the business. The failures and successes of your business can have a direct correlation with the success of your marriage. Have you ever brought a bad day at the office back home? I’m willing to bet that you have.

An unfortunate aspect of small business marriages is that many times while you are attempting to grow your business your spouse is left to take care of the children and bear other burdens without you. In some marriages, this is not a deal breaker. I have seen many couples be able to discuss how their marriage is going to work in terms of a division of labor. Helping your spouse understand that the work required in building up a business does not necessarily mean that that level of commitment is going to be needed forever. Rather, it is a season of life where you may be needed away from home more than at other times. This can help your spouse to understand what the sacrifices are for and what you all are building towards. However, not every spouse is understanding of these sacrifices, and you may find yourself in the unfortunate position where your spouse has sought an extramarital relationship to help him or she feel that their physical and emotional needs are being met.

The simple truth is that small business owners and entrepreneurs oftentimes are presented with unique issues that are not seen by other people who work salaried positions or nine to five jobs.

For example, if you are operating a small business then it may be difficult to try to argue for primary custody of your children. This is since because you spend so much time away from home it is difficult to be able to argue that you can offer your children the stability and consistency and care that they may need. This is not because you are not a diligent or good parent. Rather, it is a simple acceptance of the fact that your time will be divided unequally much of the year between your business and home. Simply put, you may never have been able to act as the primary caretaker of her children.

Another area of divorce that is somewhat more complicated for small business owners to manage is that of a division of your community estate. Property division can get complex considering the Community property laws in Texas. You may have a range of different assets, debts, and other property that need to be divided. Not only that, you and your spouse may disagree on what property should be classified as a community and what property should be classified as separate. the new paragraph where small business owners oftentimes run into issues when it comes to their business and the divorce is that your business, no matter if it is a liability or an asset, can be troublesome to value. There are multiple ways to estimate the value of your business. As a result, you and your spouse maybe disagree on how to assess the value of your business and how to divide assets accordingly. This is another reason why you need to have good legal counsel for your divorce case. Determining how to value your small business end of divorce is an important consideration.

Post-divorce spousal support for small business owners

If you do not agree to pay your spouse contractual alimony as a part of your divorce then the other option for post-divorce spousal support would be spousal maintenance. Remember that spousal maintenance can only be ordered by a family court judge. Additionally, no more than 20% of your monthly gross income it can be paid to your spouse and spousal maintenance after the divorce. For anyone that owns a small business, you know that it can be extremely difficult to determine your gross monthly income due to the fluctuating nature of money received from the business. There are so many factors that go into this issue including time of year, overall economic trends, weather, as well as vendors and clients making payments to you on time for services rendered.

In many cases, especially if your business is just starting, you may not take a paycheck for work performed in the business. It is only after your business begins to become profitable that you take anything more than a living expense check from the business. Otherwise, you are likely pouring a great deal of money into the business as far as employee salaries, overhead costs, and reinvestment of the business. If your overall wealth has more to do with the value of your company than the cash, you have on hand then you should consider yourself among a great many small business owners in this country.

At the end of the day, this is where the discussion of spousal maintenance can become tricky. Even being able to present an honest case to your spouse in terms of your income for contractual alimony purposes can be easier said than done when you are a small business owner. That requires a plan and following through with that plan to proceed with your case and resolve issues regarding spousal maintenance and contractual alimony in a fair manner.

Book an appointment with Law Office of Bryan Fagan using SetMore

Ebook

Adobe Stock 62844981[2]If you want to know more about what you can do, CLICK the button below to get your FREE E-book: 16 Steps to Help You Plan & Prepare for Your Texas Divorce

undefined If you want to know more about how to prepare, CLICK the button below to get your FREE E-book: Alimony E-Book

Other Related blogs

  1. Who Decides Alimony, A Judge or Jury?
  2. Modify, Reduce, or Terminate Alimony
  3. Can an Adulterous Spouse Receive Alimony?
  4. Can an Alimony Decree Be Enforced?
  5. Alimony in Texas: What You Need to Know
  6. An Overview of Alimony in Texas
  7. Can an alimony order be terminated?
  8. More advice on how to avoid paying alimony in your Texas divorce
  9. Are there any loopholes to avoid paying alimony in a Texas divorce?
  10. Alimony in Texas…What Does the Law Say?
  11. Will you owe your spouse alimony after a divorce

Categories: Uncategorized

Share this article

Category

Categories