Business owners: the hard-working people who provide their neighbors with jobs, give back to the community, and often pay the most in taxes.
Whether you are a small business owner like me, or are Jeff Bezos of Amazon, a divorce can have serious consequences.
As a business owner, you are comfortable with making decisions and setting goals. This page is written for you: the entrepreneurs, big or small.
Why Small Business Owners are Vulnerable in a New Jersey Divorce
Know going in that your New Jersey Divorce will have complexities beyond that of the average W-2 income earner. By reading this page you’re taking an important step in becoming informed about how to protect your assets.
In 2019 I published my first book: Happily EVEN after: The New Jersey Divorce Guide. That books answers most of the commonly asked divorce and family law questions, provides an overview of New Jersey Divorce law, and emphasizes our firm’s philosophy of working towards an amicable resolution when possible. That is not to say we don’t litigate our fair share of cases—we do—but we want to be efficient, to run our divorce files with the same efficiency with which we try to run our business.
If you settle your case amicably you are likely to cut down costs, create a better home environment for your children, and be more likely to have a productive and healthy relationship with your ex in the future.
If you can effectively communicate with your ex then you drastically increase the odds of healthy co-parenting. Wouldn’t you rather envision a future where you and your spouse are happy at one of your children’s weddings rather than risk creating a scene?
Another core part of our firm’s philosophy is that the emotional component of a divorce must be addressed. Unlike most areas of the law, in a divorce case managing emotion may be even more important than researching the relevant statutes and case law. Finally, we ask our clients to treat a divorce as though they are training for a marathon. You need to make sure you are in the right headspace, that you eat healthy, that you actively learn and become a part of the legal team—this creates the potential for an optimal outcome.
I enjoyed writing Happily EVEN After and am overjoyed that I have received a great amount of positive feedback from clients, other lawyers, and the public at large on that work. We believe in educating our clients and we want to work with client’s that are hands-on and willing to be an active part of the process. It’s great that my first book as well as the information on our website has helped educate our clients and the public at large on how to effectively navigate our state’s sometimes complex divorce laws and procedure.
However, upon completion of Happily EVEN After I regretted not being able to add more content on the subject closest to my heart: helping business owners through their divorce and limiting the negative impact of a divorce on the business owner or the business itself. That type of information was simply beyond the scope of my first book, which was written as a general consumer guide. Immediately upon publication of my first book I sat down to begin writing this follow up, which perhaps in time will grow into my second book on New Jersey Divorce Law: a new treatise aimed specifically at the hard-working business owners of New Jersey.
I hope that the below information will prove helpful. If you manage your divorce as carefully as you manage your business, then you will be able to get through the process with your personal happiness, your financial health, and your business intact.
What is Unique About Divorce Involving Small Business Owners?
If you’re reading this post, it is likely you or someone important to you is considering or already experiencing a New Jersey divorce, separation, custody dispute, or other important family law issue. But you likely won’t view your divorce the way the average W-2 employee will. Because, if you are reading this page you are probably a business owner (or married to a business owner, or both).
Let’s be honest – running a business can be tough on a marriage. It’s often a high-stress way of life that requires endless amounts of time and energy. Then, almost ironically, the fact that you own a business makes your divorce more complex. It’s like you can’t win! But true entrepreneurs rarely give up. By reading this book you are taking an important step: one of educating yourself on your important rights (as well as your responsibilities) consistent with a New Jersey Divorce.
As business owners, we often pride ourselves on “playing to win.” But I assure you, this is not a game. Indeed, a New Jersey divorce is serious business. The outcome of your case will have wide-reaching impact on your life, your children, your finances, and yes—your business.
Although courtroom procedure and minutia will have to be dealt with, Divorces and family law matters are often a highly personal process that will likely have a great impact upon your future and that of your children. Just as your future changed the day you got married so it will change again the day you or your partner file for divorce and again once the divorce is finalized. You may believe your divorce is an interesting “wizard’s duel” of sorts, but what about the collateral damage to yourself and everyone else around you? My efforts are aimed not only at providing an overview of the law, but also to impart information to help you address the emotional components of a divorce.
Divorce is a time when many people lose their sense of self. Many people lose their jobs during the divorce because it impacts their concentration and takes up a great deal of time. As a business owner, you do not have that luxury: your team depends on you. It’s best to understand from the start that a divorce in New Jersey is often a brick-by-brick matter that may take up to a year or more to complete. If you attempt to be measured in your responses and work with an attorney that will do the same, then perhaps you can save yourself a lot of money and a great deal of headaches. Of course, if you’re being pushed around and the other side is not acting in good faith then you’ll have to be more aggressive to neutralize them.
Taking the correct path can be the difference between losing your sense of self, losing your children, or losing your business—or coming out of the matter relatively unscathed and focused on a brighter future.
Although a lot goes into the divorce process itself, our firm assists business owners like you every day in crafting divorces that will reference your unique future goals. What is your ideal parenting arrangement? What assets will you be entitled to? How can you make sure your Prenuptial Agreement will be Enforced? What type of Alimony and Child Support Should be Paid? What is the appropriate valuation of your business? These are all decisions that will have a long-term impact on your life and your business.
When you’re reading this page, please take notes as appropriate. Come back and reference sections of this page that apply to you and skip over sections that do not. But more than anything else, when you’re reading this page and throughout your divorce write down your ultimate goals and do your best to not lose sight of them.
Our firm’s tagline is “Happily Even After” as a Reminder to Our Clients and Our Firm that Divorce should never be viewed in a vacuum but rather in a global and holistic manner, always keeping a long view toward the future and working towards a breathing document that can address future issues as they arise to avoid costly future litigation.
In our office we have a framed picture of two people in a family law courtroom in the 1990’s (with lawyers and judges present) dividing what must be about a thousand Beanie Babies. They say a picture tells a thousand words, the point of that picture should be self-evident. Do the right thing for yourself and your children, hire the right lawyer, keep informed, don’t lose sight of your goals, and get to your Happily EVEN After as soon as you can. Your quality of life and your business may just depend upon it.
FREQUENTLY ASKED QUESTIONS (FAQ’s) – Divorce for Business Owners (Or Spouses of Business Owners):
Although every case is fact-sensitive, this section is created to address certain issues that often come up at divorce consults involving business owner clients.
Q. How long will it take to be divorced?
A.Perhaps surprisingly, this is the number one question I am asked—even above how much the divorce will likely cost.
The average divorce is approximately one year. For a divorce where one or more businesses are involved the average may be closer to a year and a half. The actual range, however, may be as little as one or two months to upwards of three or even four years in highly-contested matters. There are a number of factors that affect how long it takes to finalize a divorce, including whether the parties pursue mediation or litigation, the complexity of the case, the reasonableness of the parties and counsel in negotiating, the speed at which financial documents are exchanged, the ease of valuing the business, and the desires of the parties to bring the matter to a close.
Q. What are the legal fees involved in getting divorced?
A. I, like most new jersey divorce attorneys, bill by the hour. For the reasons mentioned above, it is therefore impossible to provide clients with a cost as it will range on how long it takes to get divorce and more specifically by the number of hours of legal work performed. The cost can therefore range from low four digits to low six-figures, although the range for most divorces is more likely between $5,000 and $25,000 and $10,000-$45,000 in cases involving business owners. We endeavor to work efficiently for our clients to provide encompassing advice while avoiding an overly burdensome cost. Generally I will seek at least a $10,000.00 retainer for a contested divorce involving a business owner.
For motions or uncontested divorces the retainer amount will generally be less. Obviously a modest side-business may not require as much of a retainer or as much work but if you are reading this book it is assumed your business or businesses are your primary income source or primary asset.
Q. What are My Responsibilities while the Divorce is Pending?
A. Essentially both parties are required, while the divorce is pending (known as the pendente lite phase of litigation) to maintain the “marital status quo.” This means maintaining insurance, not encumbering or dissipating marital assets or incurring inappropriate marital debt, paying certain regular expenses, and the like. Parenting time and access to children should also maintain the status quo of the marriage.
Q.What if an Act of Domestic Violence Occurs?
A. You should immediately contact your local police department or the court and file a temporary restraining order.
Q. Will I be Entitled to Custody and Parenting Time?
A. In most instances, courts favor joint legal custody. There is even a movement towards joint physical custody. Joint legal custody involves the ability to make important decisions in a child’s life and physical custody addresses who will more often be providing daily care to the child. These cases are particularly fact-sensitive, but courts almost always favor parenting time for both parents unless same would be detrimental to the best interests of the parties’ child. Although custody and parenting time are generally not impacted by business ownership (and are written about more extensively in my first book, Happily EVEN After, the amount of time one spends out of the home and out building the business may impact custody claims. Likewise, the flexibility of business ownership may allow for additional parenting time or custody.
Q. How is Child Support Calculated?
A. New Jersey utilizes “Child Support Guidelines,” a type of algorithm that provides a weekly child support obligation based on various factors including the incomes (imputed or real) of the parties, the amount of overnights each parent exercises with the children, the number of children, and the children’s age. It is more difficult to impute income or calculate income in a business as it requires an analysis of reasonable business expenses. The same is true for formulating an appropriate alimony obligation.
Q. How Do I Know if I am Entitled to Alimony or if I have an Alimony Obligation?
A. Unlike with child support, New Jersey has yet (although this could change in the future) to enact alimony guidelines. Accordingly, Court’s address a number of factors such as the length of the marriage, the income/income potential of each party and the parties’ ages, in determining whether alimony is appropriate and if so, whether the alimony should be permanent, term, rehabilitative, or reimbursement. As stated above, alimony may also be provided “pendente lite.”
Q. Why should I Choose Carl Taylor Law Firm, LLC for my Divorce involving Business Assets?
A. Because we will work with you to assess your goals and help provide closure so you can move forward with your life. Hopefully this book will help answer the question of whether we will be a good fit or not for your important New Jersey family law matters. Managing partner Carl Taylor is a business owner and enjoys working with other entrepreneurs of all sizes. Our firm emphasizes the representation of hard-working business owners and provides resources and information to such clients so they can become an active and valuable part of their own legal team.
A Note on Initial Consultations
A divorce initial consultation is very important. Generally, it is the first time an attorney and a prospective client meet one another. It is important for both parties to be prepared for the meeting and determine if a successful working relationship is possible. Some clients find the initial consultation stressful, so I wanted to address the nature of an initial consultation, at least how our firm handles them.
Q. What to Bring to the Divorce Initial Consultation?
A. There are certain intake procedures and forms that our firm utilizes prior to meeting with a client. The more information we receive prior to the initial consultation, then the better prepared we can be to provide preliminary advice on how to proceed.
This is even more important when a party is a business owner as there will be no handy W-2’s or paystubs to demonstrate income. We will need at a minimum any prenuptial agreements, any prior orders, the last three years of tax returns, and K-1’s, incorporating documents, and other relevant business and personal documents.
Although our firm is not formally retained until a retainer agreement is signed with our firm, we do like to provide clients with general information as well as more specific pieces of information such as likely alimony and child support ranges. As our website has numerous articles, videos, podcasts, e-books, and more available, we encourage you to visit www.TaylorDivorceLaw.com to learn more about our firm and about New Jersey divorce law prior to our initial consultation and throughout our firm’s representation.
Q: What Types of Questions Will You Ask Me During the Divorce Initial Consultation?
Similar to most doctor’s offices, I like to begin with asking basic information such as a prospective client’s contact information, date of birth, date of marriage, etc. Then, I generally will ask the prospective client why they are meeting with our firm.
It is important to air out the marital issues so that we can later focus on more technical information gathering. Has the prospective client attempted marriage counseling? Is their marriage salvageable? Has their spouse already retained an attorney or filed formal divorce proceedings? These are all important questions that will be asked.
From there, I will generally ask a series of questions in hopes of learning the parties’ financial situation. New Jersey is a “no-fault” divorce state, so financial considerations are, along with child custody, the heart of New Jersey divorce law. Some of the areas I will address with a client include:
- Both parties’ income/employment (personal or business);
- The status of their children.
- Possible custody issues.
- Real property such as the marital home.
- Business assets and liabilities;
- Bank accounts.
- Investment accounts.
- Retirement accounts or pensions.
- College costs.
- Premarital, gifted, personal injury, or inherited property.
- Life insurance.
- Health insurance.
- Automobiles, vehicles, boats.
- Stock options.
- Profit sharing plans.
- Loans/debts.
Once these important topics (and other such topics) are discussed, I will then be able to provide the potential client with some perspective on where their case may be heading. I may discuss alternate dispute resolution options with the client. If litigation is the likely outcome, I will provide some insight into how the case will likely turn out. I will also provide clients with a copy of my book Happily EVEN After (and if appropriate, a copy of this book as well) along with any other important articles. This allows clients to save money by being able to reference answers to some of their questions without being required to seek attorney or paralegal time. Of course, if we are needed we are always here to assist. This is the backbone of the efficiency that our firm prides itself on.
Initial consultations end with a question/answer session and information on the next steps if a prospective client wishes to become a client. Likely costs, attorneys’ fees, and the retainer amount will also be discussed at this time.
FAQ Conclusion
By focusing on the goals of the client and meshing those goals with the facts of the case and the relevant law, a tailored strategy can be crafted from early in a case to reach the desired outcome or goals. This is true for all divorces and is particularly important for divorces involving business-owners.
Divorce for Business Owners: The Why?
“Entrepreneurs must be willing to be misunderstood for long periods of time.” – Jeff Bezos, CEO and Founder of Amazon
Many studies suggest that there is a 10% higher risk of divorce for business owners. For those of us that own businesses (or are married to an entrepreneur), this number is probably quite shocking.
Indeed, how is it not higher? Long hours, high-stress, business trips, sporadic cash-flow, and sweat equity—all time away from our families working to build a better future but sometimes neglecting the present.
And then there is the passion. For us it’s often a great passion building our businesses, but for our spouses there was probably that moment early on when talking about how many widgets we sold (or clients we served) became just a bit less exciting. As entrepreneurs, big or small, we have to juggle the money, be creative, have all or most of the answers, be therapists to our employees, and hopefully be home in time for dinner. Most marriages do not come to a natural end because of a blow-out argument, instead the foundation of the marriage is slowly chipped away and eroded over years—and all with the best of intentions.
Still, divorce is a complex and not easily reversed procedure. For that reason I encourage most of our clients to seek marriage counseling (and/or individual therapy) prior to filing for divorce. I find that this has an advantage even if the marriage cannot be saved because at the very least it helps both parties process the end of the marriage. Emotion is natural and has to be addressed—better to do it in a safe place with a therapist than in a courtroom when both sides are paying hundreds of dollars an hour for lawyers.
Conclusion
As you reach the conclusion of this guide, I hope you have a better understanding not only of the nuts and bolts of New Jersey Divorce law and procedure, but also how a New Jersey divorce may be distinct for business owners.
As humans we like to be in control, but in a divorce certain elements are out of our control. We largely cannot control the judges, the law, or how the other side acts.
But we can control our own though processes and actions to move forward in the right spirit seeking the most advantageous yet reasonable approaches available to us.
It’s only human to feel negative emotions such as anger, frustration, disappointment, jealousy, and guilt during a New Jersey Divorce—particularly when you must also juggle all the demands of entrepreneurship. Working as a divorce attorney, (and as a fellow business owner), I know that sometimes I too have to address my own emotions when caught up in a moment. But it’s ultimately a lot cheaper and more effective to take those emotions out in a healthy way. Go trash a guitar, take a long run, or hit a punching bag: you’ll be better off in the long run and so will your children.
If there is one philosophy I hope I got across in this overview, it’s that emotion is the single-largest X-Factor in a divorce. Although as business owners we like to pride ourselves on being reasoned and logical, we are also people that are used to taking charge, and we are usually passionate people.
Emotion and its impact on a divorce is a constant in all divorces—whether your are the founder of a fortune 500 company or own a local landscaping business. How you bob and weave through the difficult process will have a great impact on your post-divorce life and happiness—as well as that of your business.
Although your attorney is important, nobody will have a greater impact on your divorce or play a more important role than you! We look forward to hearing from you about any questions you may have involving this case.
So What Now?
Partner with Carl Taylor, Esq.
Ready to Find Your Happily EVEN After? Call Today at 609-359-3345 to Schedule a Confidential Consult (or click here to self-schedule online) and Receive a Free Copy of the 3rd Edition of my 200+ page book, Happily EVEN After: The Guide to Divorce in New Jersey.
