Your Guide to Alimony as a Small Business Owner

Managing a small business while going through a divorce is a significant challenge. Running a business requires focus and effort, and the added complexities of divorce can make it even more difficult to maintain stability. During divorce proceedings, small businesses often face challenges due to asset division, spousal support, and other financial factors. To protect your business, it’s essential to handle the divorce efficiently and thoughtfully. Understanding alimony for small business owners and other financial implications is critical for ensuring that both your personal and professional life remain on track during and after the divorce process.

Operating a small business: the importance of having a plan

That little saying may sound fun and breezy in a blog post environment, but the reality of the situation is that you may not have a plan in place to do either of those things. As someone who operates a small business, you know how important it is to have a plan before engaging in anything new. For instance, you probably would not want to launch a new product or service in your business without having given quite a bit of thought to doing so first. without testing the product or service in the marketplace, asking customers their feelings, or determining a cost for the product before you begin to produce it would mean that you could lead your business into difficult circumstances. Having to go back and correct mistakes associated with not having a plan only adds insult to injury.

Rather, it is a much wiser decision to consider your options and to think ahead in terms of planning to position yourself well when it comes to a new product or service. The same applies to your divorce. If you go into your divorce without a plan, then the odds are good that you will suffer the consequences for not having done so. While many people look at a divorce as something they would prefer not to ever have to engage in, the reality is that sometimes we don’t get choices about the trials we have in our lives. With that said, you can truly benefit yourself, your business, and your family by having a plan before the divorce.

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Planning a divorce as a small business owner

Small business owners go through the same stages of divorce as anyone else. The main difference is that as a small business owner you have a few more factors to consider. On a practical level, your income is variable from month to month. While there may be some of you reading this blog post who have consistent incomes monthly due to the nature of your work most of you likely have variable incomes based on several economic factors. The fact is that your income cannot afford to dip during the divorce. Your bills will still come in and you will still have your typical responsibilities to contend with period therefore, you need to be able to figure out how you are going to manage your divorce and take care of your business all at the same time.

From my experience, the best way for you to do this is to develop a plan or strategy and then work to see that plan into action. If you have never gone through a divorce before then it would make a lot of sense for you to work with the person who has. For example, the attorneys at the Law Office of Bryan Fagan possess unparalleled experience compared to other family law attorneys in Southeast Texas. We have a team of lawyers who work collaboratively on cases with your best interests in mind as a client. Contacting our office is a great idea if you want to transition from feeling unsure and worried about your divorce case to feeling confident and prepared to navigate any challenges that may arise.

Expert consultations: guiding your divorce journey

Our licensed family law attorneys offer free-of-charge consultations six days a week at our three Houston area locations, over the phone, and via video. Reach out to us today to start your journey toward gaining knowledge about Texas family law and understanding how a divorce or child custody case could impact your family’s circumstances. Our consultations offer you an opportunity to learn more about these legal matters and discover how our attorneys can represent you effectively, benefiting you, your family, and your business during a divorce case.

Navigating a divorce is akin to a journey; entering it may seem directionless, but emerging with accomplishments demands clear goals. Simply aiming to conclude the case swiftly overlooks the potential for meaningful outcomes. Instead, crafting specific, actionable goals tailored to your unique circumstances is paramount. While your objectives may differ from those of others, initiating this process marks a pivotal step toward navigating your divorce journey effectively.

Unfortunately, if your spouse has already filed for divorce from you then you do not have the luxury of taking as much time as you would like to come up with goals and brainstorm in that way. Rather, you have a deadline in front of you as far as responding to a divorce petition and possibly collecting evidence to attend a temporary orders hearing, mediation, or respond to discovery. There is an even greater sense of urgency that you should have as far as performing all those steps and developing a strategy and goal-oriented plan for your case.

Managing your business through divorce

All the while, your business will need to continue to produce an income for yourself and your family. While it may feel like the entire world has come to a halt due to your divorce the reality is that your life will continue no matter what else is happening. Your customers, the mortgage company in any other persons in your life who rely upon you don’t care as much about your divorce as you do. While that may sound harsh it is the reality of the situation. For that reason, it’s essential to be as intentional as possible and to accomplish what you must regarding your business and your divorce.

If you struggle with time management and finding enough hours in the day to accomplish what you need to, a divorce will only exacerbate this issue. The pace of your life may seem to take on a breakneck speed due to the time commitments of a divorce as well as the other factors in your life. To keep your life from seeming like it is spiraling out of control I recommend you get on the phone and contact our office today. Not having a plan is a bad idea in a divorce.

You know this is true from being a small business owner the same applies to your divorce case. Rather, you can take the steps necessary to contact our office, meet with one of our attorneys, and ask questions. Once you learn more about our office you can decide whether you want to take us on as your attorney. The difference between proceeding into a divorce as a small business owner with one of our attorneys versus another option can be significant.

Contractual alimony and spousal maintenance in a Texas divorce

The basics of this subject are that there are two different types of post-divorce spousal support in Texas. The two types are spousal maintenance and contractual alimony. What it means to be awarded either of these types of post-divorce spousal support is quite different. To begin with, spousal maintenance can only be awarded by a family court judge after a divorce trial. On the other hand, contractual alimony can only be negotiated upon by you and your spouse and agreed to either in mediation or informal settlement negotiations.

Spousal maintenance is typically arrived at when you and your spouse cannot agree on a big year for contractual alimony or simply do not agree that post-divorce spousal maintenance is necessary. A family court judge would consider a range of factors and whether you or your spouse would be unable to meet your minimum basic needs after the divorce. So long as the other spouse can pay spousal maintenance then a figure could be awarded. That monthly amount of spousal maintenance could only be awarded if all the factors are met, and you and your spouse had been married for at least 10 years.

Spousal maintenance vs. contractual alimony

Although spousal maintenance takes a trial for it to be awarded, the benefit of spousal maintenance is that it is enforceable by the court judge. For example, if you and your spouse have a relationship where he pays you spousal maintenance after the divorce and then he does not comply with the order you would have the ability to file an enforcement case against him to bring your matter before the judge. In an enforcement case regarding spousal maintenance, you would specify the specific violations of the order, cite the language contained in your order, and then be able to present an argument as to why relief is necessary. A judge would have a range of options available when it comes to punishment including finding him in contempt of court and even ordering jail time in extreme situations.

On the other hand, contractual alimony can be arrived at much more simply through settlement negotiations with your Co-parent. We see that these settlement negotiations can oftentimes help you and your spouse arrive at a number for contractual alimony that is based on the specific circumstances that you face. You can negotiate for contractual alimony without being limited to 20% of your spouse’s gross monthly income, regardless of the marriage duration, unlike spousal maintenance. As with anything else within the settlement negotiations you and your spouse can consider your specific circumstances and make decisions based on what is in your best interests.

Risks of contractual alimony over spousal maintenance

Negotiating for contractual alimony instead of spousal maintenance carries its own set of risks, despite the challenges involved in seeking spousal maintenance through trial. The most significant risk is that if your spouse fails to pay, they agreed to the amount of contractual alimony in the future the judge has fewer remedies available when it comes to holding your spouse accountable for their failure to pay. This includes not being able to hold your spouse in contempt of court.

Additionally, suppose that you and your spouse had agreed to an amount of contractual alimony that goes well beyond what would have been allowable under spousal maintenance statutes. In that case, a judge could potentially only enforce your contractual alimony orders to the point where he or she would have been able to enforce spousal maintenance. Moreover, it is contract law that governs the enforcement of contractual alimony. This is because contractual alimony is a contract between you and your spouse rather than anything falling under the Texas family code.

How does the post of spousal maintenance impact you as a business owner?

The family court judge may order varying amounts of spousal maintenance based on the specific circumstances of your case. Remember that it is the minimum, basic needs of you or your spouse that must be the benchmark for awarding spousal maintenance. In that case, what your minimum basic needs are can differ dramatically from another person. As a result, you will need to look at your budget and truly determine whether you need spousal maintenance. It would be a mistake to proceed to a trial on this subject only to find that the judge disagrees that you cannot meet your minimum basic needs with the income or assets that you own.

The next factor that I would look to when it comes to spousal maintenance and you as a small business owner would be related to the calculation of your income. When I think of a small business center tend to think about you as someone whose income can be dramatically different from month to month. We have already talked about how your income may change based on several factors beyond your control period, for example, if you own a business working in landscaping then you may do much more work in the spring and fall than in the winter and summer. As a result, for six months out of the year, your income may be much lower than at other times of the year. However, at least in this example, you would be able to better anticipate the dips and increases in your income based on seasons past.

Predicting and estimating income for divorce and beyond

The income that you have will depend upon the product or service that you offer the public. For example, if you work as a small business owner in a restaurant situation then you may be able to become profitable rather quickly. Finding a market for your food, advertising, and then finding consistent clientele is what it takes to become a profitable restaurant. If you can survive the first few months of operating a restaurant, then the odds are decent that you will become profitable and be able to draw on income from your work period this is as opposed to running a technology startup whose income is much more difficult to quantify and whose profits may be in question for years and to running your operation.

No matter what kind of business you operate, how long you have been in operation, or any other factor associated with the business you need to be able to accurately predict and estimate your income from month to month period this is important not only when it comes to your divorce and spousal maintenance but also for planning out your post-divorce life from a budget perspective. An inexperienced family law attorney with the Law Office of Bryan Fagan can help you perform these steps in your divorce and you can use that information to help you plan for your future life once the divorce comes to an end.

Conclusion

Navigating the intersection of small business ownership and divorce can be overwhelming. However, by proactively addressing the challenges that arise, small business owners can protect their businesses while managing the complexities of divorce. Understanding the impact of factors such as alimony for small business owners is crucial, as it affects both personal and professional spheres. Being prepared for these financial considerations ensures that you can successfully navigate the divorce process while safeguarding your business’s future.

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