Divorce & Your Business: The Top 10 Things to Consider

By | Divorce, Marital Property Division

When couples own a business together, they have that much more at stake in a divorce. Even enough to
put off divorce until a liquidation event occurs in some cases. If divorce is a certainty, here are thoughts
on how to keep, modify, or divide the business. Also, in this blog will be what not to do.

1. Understand its character.

First, understand whether this company is community or separate property meaning, is it even a marital asset or wholly-owned by an individual party? Was the business created or acquired during the marriage? What funds, if any, were used to acquire the business and are those separate property funds? If it was created or acquired before marriage AND able to be traced by clear and convincing evidence, it may be characterized as separate property. There may also be arguments that the community estate or separate estate is entitled to reimbursement. For example, if the separate estate of one of the spouses purchased inventory for the community estate company, the separate estate may be entitled to be paid back for the inventory. (note: Every time I say argument, think $$$$, because that is just a lawyer arguing a side not a forgone conclusion.)

2. What’s in a name?

Whether or not a company is titled in your name, your spouse’s name or jointly together, will make a difference. If the company is a corporation for example, and you own all of the shares in your sole name, you have an argument that the property is sole managed community property and it is therefore more likely to be awarded to you in the divorce. Of course, this will likely mean your spouse will get a like amount of another asset awarded to him/her.

3. Good Will Making.

Let’s say you own 100% of a consulting company, but it’s your spouse that does all the consulting and whose name gets all the referrals. Perhaps, you have all the authority in the world to manage the company, but without your spouse doing the work and knocking on the doors, there is no income to manage. The more important your spouse’s name, reputation and work product to the business is, the lower the company is valued. Further, your spouse could simply quit working for the company you “own” and start their own.

4. Management.

Let’s say you and your spouse hate each other’s guts, but you run a darn good business and you don’t want to stop that side of the ‘er – partnership. Oftentimes, each spouse provides an indispensable value to the company. Think Chip and Joanna Gaines, Beyonce and Jay-Z, Jeff and MacKenzie Bezos (wait -er?). What would Fixer Upper look like without Chip throwing a sledge hammer? Recognize that your brand could be connected to both of you. In this situation, consider amending company agreements and bylaws so that each of you owns an equal amount with tie-breaker provisions and buy-out options should the best intentions fail. Involving a CPA and corporate attorney in this arrangement is recommended, unless you think you can do your own brain surgery too.

5. What Not To Do – Forgo Paychecks.

Many couples have a small business in which both people run the business full-time, but only one spouse earns a paycheck. I get it. It’s another payroll item and a hassle. But when you get divorced, the Court will want to know who earns the money and who does not. A person who does not have shares, units or an interest in the company at all and who also does not draw a paycheck will find they have few grounds to seek temporary control of the property. This means their direct knowledge of the company affairs could be withheld from him/her, cutting him/her off from cash flow and material information needed to value the business.

6. Divorce Planning Back-Fire.

Let me guess, your business was flourishing until right before the divorce was filed? Now the company is under water and should probably wind up? Us divorce lawyers see this all the time. It could be true, but it is very suspicious when the family’s main asset has decreased in value right before a divorce begins. At the same time, the decline in the business could be emblematic of problems in the marriage or one’s personal life. It is important to have good records at least three years back reflecting the business’s fluctuation for the sake of arguing either a temporary dip or a true decline in value. See above about argument$.

7. Being in the Red.

Oftentimes, lines of credit, security agreements and promissory notes are signed by one person in the marriage. This can leave that spouse at a disadvantage when dividing debt. The business may be doing well and in the black, but the guarantor knows that the bank will be pounding down his/her door when the red times hit. Although a divorce court will not necessarily take this into consideration for a number of reasons, it does matter in terms of valuing the property. If the debt is entered into jointly, it creates a more sober and realistic approach to valuing and then dividing assets.

8. DON’T go to Trial.

Every client has an automatic right to trial and a jury in some cases. But DO NOT. A trial judge will not likely secure debt payments, structure buy outs at a fair value, equalize tax liability, require amending operating agreements or otherwise get creative. A trial court will most likely only award property to a spouse or sell property and divide proceeds. Get a good CPA, a corporate lawyer and a divorce attorney who will structure a reasonable and private settlement. Believe it or not, CPAs and lawyers can actually be very creative in this regard. If you want to continue running the business with your spouse but protect your ability to get out (said every business person ever), this is possible with the right professionals.

9. Fraud Considerations.

I used to know a restaurant owner who took cash out of the register to pay for babysitters while they were married. It was a nice perk while it lasted. Can you imagine the amount of self-dealing that could be happening in your family owned business? Generous reimbursements are one thing, socking up faux debts and hiding cash is another. Perhaps the company is cash poor because it gave an unsecured loan to a cousin that has a weak or no explanation for repayment terms. Or perhaps there is an effort to dilute your ownership interest and bring on investor (college roommate) who will have majority decision making. If this scenario sounds like your situation, you may need to sue the company to remove your spouse’s hands from the honey jar, that is if you are also an owner. Again, you will need an experienced corporate attorney and divorce litigator to seek repayment of the fraud, obtain a judgment, or seek a rebalance of your divorce award. This scenario can be a real nightmare in terms of emotional stress and attorney’s fees. It could also be the only way to sort out the extent of the damage. Do yourself a favor and stay involved in the business enough to watch who the checks are being made out to and where the deposits are going.

10. Buy-Outs.

Buy outs can occur in several ways. It could be in continuation of joint ownership and management pending a sale or election of one of the members. With properly structured paperwork, spouses can be divorced but not divide the business to one or the other spouse until a certain event. As in non-married business partners, when one wants to sell his or her portion of the business, the other partner typically will have an option to buy. The key is to make sure the price is right in that buy out. If that sounds too complicated, a spouse can assign his or her shares or interest in the company to his or her spouse in exchange for a promissory note. What happens if the promissory note is never paid? The promissory note could be drafted in such a way that the shares of the company are held in trust by a third party until the note is paid in full. This will ensure that the payor is motivated to stay current on the notes. Other considerations will need to be made for the risk of the payor filing bankruptcy or diluting shares.

Divorcing can be particularly intense and problematic when a business is involved. Attorney’s fees could be exponential, compared to what they would be for a divorce with simple assets. Reasonableness on both sides is the key to preserving the assets during the divorce.

Mistakes people-pleasers make when divorcing a narcissist, from a divorce lawyer

By | Uncategorized

So common is it that a potential new client tells me that they are married to a narcissist, that I actually have a specific knowing smile in response and I swear to myself I should create a YouTube channel about divorce and narcissists. I’d make a fortune even if I only charged $5 a viewing.

Note: I am not a psychologist, psychiatrist and I have zero training to be preaching about personality disorders. Everything I know, I’ve learned on the job. Take it with a grain of salt.

Did Tom Cruise really love Katy Holmes? Or, did he love how she looked when he was looking down on her from his stool in their wedding photos? He certainly made a fool of himself in the name of love but wasn’t it really more about the attention he got? Despite reports that Katy “won” their divorce (or at least did better than Nicole Kidman), I’d put money on Tom bragging that he was the one who outsmarted her and that the reason he has Suri most of the time is because “he let her.”

Divorcing one of these gems? Here are some common mistakes people-pleasers make divorcing narcissists. Drum roll please. . .

  1. Not filing first. Assuming you have made the moral decision to get divorced, be the first one to file for divorce. The person who files first gets to go first. That means that party gets their story out first at the hearing on temporary orders and at trial. It means that person’s lawyer will give the first impression of the case. The person who goes second or last has the hard job of disproving what has already been said or suggested and retelling the story in his or her own light. It’s a compromising position. Most likely the narcissist will have a “poor baby” approach, as in, “I really had no choice but to file, since he doesn’t bring me coffee anymore” and with this story line going first, it forces the people-pleaser to get defensive which drowns out the real story, that being that there was no room for another person (you) in the marriage to a narcissist.
  2. Be ready to fight the obvious. A people-pleaser would never sell a car to a friend for a premium price, but a narcissist would. A narcissist would never concede you broke up with her, but a people-pleaser would let you have the final word. Do not assume that just because you have always taken care of the kids or operated the business that your spouse will concede that you are primarily responsible for those items. This is especially important because you need establish the status quo to your judge. Be ready to defend the last two years of painful homework projects or to demonstrate you have prepared all the company’s tax returns and landed the biggest client.
  3. Trying to prove a point. Don’t. Even. Try. What does it matter if you have won every battle or even the war? It will make no difference to the narcissist, who is still clothed as an emperor. Narcissists will walk out of a courtroom having been ridiculed by a judge and want to celebrate with the local sommelier’s choice in wine with red meat. Therefore, don’t think if you could just “show her” or you could just get the “judge to tell him”, that it will be downhill from there. Nope. You married a narcissist, so don’t for a second think that all the granted motions in the world will humble him.
  4. Not carbo-loading. Here it is, here is your permission to go to a buffet in jeggings. A narcissist plans on his spouse complying with his plan for division of assets and custody arrangement. In the narcissist’s mind, the narcissist will simply prepare the decree and the spouse will sign it. Divorcing a narcissist will not be over and done in a couple of months unless you give him everything he wants including the things he demands at the last minute. Oh yes, to a narcissist, “what’s mine is mine and what’s yours is mine”. Awarding all of the assets to the narcissist is just papering what is already true to a narcissist. Since you can’t make the narcissist understand that your inherited money is actually yours, you will have to set the case for trial and plan on going. It’s like a marathon: it takes a year to prepare for and complete and you are delirious at the finish line (if you make it). The only difference is you have a lot less money now, hate your lawyer (at least a little) and you may have kid issues to deal with. Like the jungle, the tired animals get eaten. So, carbo-load because this is going to take a while, you might as well enjoy it.
  5. Expecting mediation to work. Where a people-pleaser might get worn down by the long hours stuck in a room with a lawyer (gag), a narcissist is just getting started and is appreciating how all the professionals have their day tied up in what she will not agree to. Picture the scone-eating narcissist being asked if she would like creamer or milk in her tea while she contemplates whether or not she can live without his grandmother’s diamond watch. Go to mediation but have a plan and listen to your lawyer.
  6. Self-infliction. A narcissist is the blade a people-pleasure cuts himself with. The people-pleaser mistakes the narcissist’s joy as love. The joy was getting attention, not being with their “person.” The people-pleaser really loves the blade, and misses the blade even when the claws come out in court. Loving your spouse is not a bad thing. Love is an exhibit of our humanness, as beautiful as the body’s ability to heal itself or birth a baby. Deal with the love, loss, rejection and sadness without cutting yourself on the blade. Cut the nerve instead and cooperate with your spouse but don’t inflict new wounds on yourself. You will end up with the wounds and the narcissist will only feel better about herself because you “did it to yourself”.
  7. Be ready for Karpman’s triangle. According to Karpman, the cycle of dysfunctional relationships involves three roles: victim, persecutor and rescuer. Pay very close attention to the role you are playing in the drama cycle so you can learn what it is when the narcissist plays victim or rescuer. If your spouse said you would never see your kids again, get ready for him to play victim of the year when you are awarded primary of the kids. Offer him a compromise and get ready to be the victim when he takes advantage of your kindness.

Kelly Decker leaving Decker Jones to form firm with husband – Fort Worth Business Press March 1, 2017

By | Uncategorized
Decker Jones PC, the second oldest law firm in Fort Worth, and Attorney Kelly Decker jointly announced March 1 that she has left Decker Jones to start a new law firm with her husband, Fort Worth attorney Olyn Poole. The new firm will be called Decker Poole PLLC.

After starting her legal career at another Fort Worth-based firm, Decker joined Decker Jones 10 years ago. Her grandfather, Robert Decker, became a named partner of the firm over 50 years ago.

Having considered the idea of having her own law firm for several years, Decker decided the time was right to pursue her entrepreneurial desire to have her own law firm.

 “We will certainly miss having Kelly at our firm, but we are excited for her and wish her nothing but the very best,” said Senior Partner Chuck Milliken. “We will always consider her to be part of our family.”

“My 10 years with Decker Jones have been rewarding and exciting as I have developed my law practice,” said Decker. “I appreciate the mentorship I’ve received and know that being part of the Decker Jones family helped make me a better attorney. I have developed strong friendships with my partners at Decker Jones, which I know I will retain even though I am no longer ‘officially’ with the firm.”

The Decker Poole firm has signed a 1,770-square-foot office lease in Ridglea Bank Building at 6300 Ridglea Place in Fort Worth.

 Decker Jones was originally formed in 1896 and has grown into a full-service law firm comprised of 27 lawyers practicing in a variety of different areas including business and corporate law, merger and acquisitions, commercial and real estate litigation, construction law, employment law, estate and probate law, intellectual property, oil and gas, real estate, and family law. The law firm is headquartered in Fort Worth and has clients throughout Texas, across the United States and internationally.

www.deckerjones.com/

www.DeckerPoole.com

Kelly Decker of Decker Jones starts a new law firm – Star Telegram

By | Uncategorized

BY MAX B. BAKER
maxbaker@star-telegram.com

FORT WORTH
Kelly Decker, who has worked at the Decker Jones law firm that her grandfather helped build, is leaving to start practice law in a new firm with her husband.

While there will no longer be a Decker among the 27 attorneys working at Decker Jones, the county’s second oldest law firm, the storied law firm will not change its name. Kelly Decker’s new firm with her husband,Olyn Poole, will be named Decker Poole.

Both Decker Jones and Kelly Decker, who joined the firm 10 years ago, parted ways as friends.

“We will certainly miss having Kelly at our firm, but we are excited for her and wish her nothing but the very best,” said senior partner Chuck Milliken in a prepared statement. “We will always consider her to be part of our family.”

Decker called her time at Decker Jones “rewarding and exciting.” After considering the idea of having her own law firm for several years, Kelly decided the time was right to pursue her entrepreneurial desire to have her own law firm and be her own boss.

“I appreciate the mentorship I’ve received and know that being part of the Decker Jones family helped make me a better attorney” said Kelly in a prepared statement. “I have developed strong friendships with my partners at Decker Jones, which I know I will retain even though I am no longer ‘officially’ with the firm.”

Decker Jones was formed in 1896 and has grown into a law firm practicing in a variety of areas including business and corporate law, merger and acquisitions and real estate litigation. While headquartered in Fort Worth, it has clients across Texas, the United States and internationally, a company release states.

Max B. Baker: 817-390-7714, @MaxbakerBB

Read more here: http://www.star-telegram.com/news/business/article135977223.html#storylink=cpy