Divorcing doesn’t have to ruin the family business in Pennsylvania

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Small businesses are the heart and soul of the economy in Bucks County and throughout the rest of the country. According to the Small Business Administration, approximately 90 percent of all of the businesses in the U.S. are family owned and run. Running a small family business comes with several advantages, like more convenience, flexibility and lower employment costs. However, things can quickly get complicated when the owners of the business decide to separate and divorce.

It all starts with the prenuptial agreement

Before a couple even says “I do,” they should already be planning for their financial future with a prenuptial agreement. This document acts as an insurance policy in case divorce ever becomes part of the equation. One of the mistakes that small business owners often make is not drafting this important document until it’s too late since they previously believed that divorce would never become an option. However, according to Forbes, over 50 percent of married couples in the U.S. eventually divorce so obtaining a prenuptial agreement should be a priority for all married couples, and those that own a business together in particular.

This agreement should be in writing, provide a full disclosure of the business’ assets and liabilities, be executed by both parties and without coercion from one side and documented in a recordable format.

Making it work after the divorce is finalized

Just because a marriage is ending doesn’t mean that the business has to go down along with it. Divorced couples can still stay in business together and be successful if:

  • They are rational and consider compromise.
  • They hire an independent business appraiser as part of the divorce proceedings.
  • They consider how their roles will shift in the workplace after they are divorced.
  • The business stays relatively the same and doesn’t undergo any big changes until after the divorce is finalized.

Although it can be a daunting task to split with a partner and still maintain a business, it can be done with a little work and a lot of communication. For example, according to Businessweek, a divorced couple that owns a bakery in the Boston area worth $2.5 million has been in business together for over 35 years. The couple, who were married briefly from 1979 to 1981, found that although their marriage didn’t work they were able to keep their business going out of admiration for the each other’s business skills.

If you and your spouse are considering divorce and are concerned about the future of your family business, contact an attorney in your area that can work through these concerns and ensure that you and your spouse are able to transition smoothly from being marital partners to business partners. You should also realize that a business has value and a competent attorney can assist in ensuring that both partners get value for the efforts they contributed to the business and find ways to separate while preserving the business.

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Clearances for Adoption

Background checks are required for all prospective parents in an adoption matter. In Pennsylvania, there are three background checks that are required: Pennsylvania Child Abuse History Clearance through the Department of Human Services, Pennsylvania Criminal Record Checks through the State Police, Federal Bureau of Investigations (FBI) Criminal Background Check through the Department of Welfare. These background checks must also be completed for all other adult household members where the adoptee will reside. At this time, requests for all three background checks can be done online. The cost for each background check is nominal. Fingerprinting is required for the FBI Criminal Background Check.

New Jersey requires state, federal and local criminal history checks for adopting parents and all household members as well as child abuse record information background checks. If a prospective parent has lived outside of the current state in the five (5) years immediately preceding the adoption petition, similar background checks must be acquired from each state where he or she previously resided. Background checks must be less than one year old at the time of the adoption hearing. The background checks are reviewed in the context of a home study, where required, and attached to that report. Where a home study is not required, the background checks can be submitted to the court with the petition for adoption. The mere existence of a record does not necessarily thwart the adoption process. The court must look to the nature of the record and whether it poses risk to a child. If there is no substantial risk, the adoption may still proceed.

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Confirming Consent to Adoption

If the natural parent(s) agree to the adoption and are signing off on their rights, prospective parents may file a petition to confirm their consent to finalize the voluntary termination of their parental rights. In this scenario, the child is usually already in the care of the prospective parent(s). The prospective parent must consent to accept custody of the child until such time as the child is adopted. The prospective parent(s) would also need to file a report of intention to adopt with the court.

The natural parents should appear at the hearing to offer testimony regarding their consent. The court needs to verify the consent was entered knowingly and voluntarily. If the natural parents are not present, the parties who served as witnesses at the time the consent was executed may be called to testify as well as any notary that notarized the document. After the hearing, the court may enter a decree terminating parental rights if satisfied that the consents were properly executed and there was no duress or fraud. The prospective parent(s) would still need to appear at subsequent hearing to finalize the adoption. Hearings for confirmation of consent are to be confidential such that the identities of the parties involved is not disclosed.

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Handling financial affairs during a Pennsylvania gray divorce

Older couples often have valuable assets, complex property and little time to change retirement plans, making fair settlements crucial in gray divorces.

The phenomenon of “gray divorce,” or divorce after age 50, has become increasingly common in the last decade. The proportion of people divorcing after 50 increased from 10 percent to 28 percent from 1990 to 2010, according to the New York Times. Today, the number of divorced people older than 50 has outstripped the number of widowed people in the same age group.

There is no denying that divorce is a complicated process at any age. However, people preparing to divorce after age 50 in Langhorne, Pennsylvania, should expect to navigate some especially challenging financial issues.

DIVIDING COMPLEX ASSETS

One issue older couples often face is the division of complex assets, according to Forbes. Older individuals have had more time to accumulate personal assets, and couples in longer-lived marriages may have built up substantial marital assets, such as homes, retirement accounts and other savings. Inheritances from parents and other relatives can complicate matters as well, as the distinction between marital and separate property can be difficult to define.

Spouses can work together to decide how assets will be divided, but usually, spouses can reach a fairer division by seeking legal guidance, since many people do not understand their rights during property division. For instance, many individuals do not realize they may be entitled to part of a spouse’s retirement accounts, including 401(k)s, pension plans or IRAs, if contributions were made to those accounts during the marriage.

Many assets can be divided by agreement or court order, but some assets cannot be distributed this way. For example, retirement plans can only be divided with a Qualified Domestic Relations Order. It is beneficial for older couples to seek legal help when they divorce, to ensure that a fair settlement is awarded and that all court orders and documents are in order. Otherwise, spouses run the risk of losing financial solvency following the separation.

PLANNING FOR RETIREMENT

Another significant issue with divorcing later in life is that both spouses are near retirement, leaving little time to rebuild savings. Typically, even people who were on track to enjoy a comfortable retirement together may not have enough saved to fund two retirements. Separate retirements can cost 30 to 50 percent more than retiring as a couple would, according to USA Today.

Couples should remember that expenses associated with everything from housing to travel to in-home assistance double after a divorce. In light of these increases, many couples ultimately must choose between three options:

  • Staying in the workforce and postponing retirement.
  • Re-entering the workforce.
  • Retiring on track, but with significantly different expectations.

Individuals facing these issues can benefit from hiring a financial advisor before the divorce is complete, so they can realistically evaluate what they will need to survive independently. The sooner spouses evaluate their financial needs, the better they will be able to communicate those needs during mediation or court proceedings.

Anyone preparing for divorce later in life should strongly consider meeting with an attorney. An attorney can advise an individual on legal rights and help him or her reach a settlement that will reduce the financial impact of the divorce.

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Do You have a Will in Place?

When you pass away, it is important to have a will in place so that your assets are distributed per your wishes. However, if you pass away without a valid will in place, your estate will be distributed pursuant to Pennsylvania intestacy rules.

If you are married at the time of your passing, the following rules apply:

  • If you do not have surviving parents or issue (i.e. children), your spouse will be entitled to your entire estate.
  • If you leave issue (all of whom are also issue of your spouse), then your spouse will get the first $30,000 and half of the remaining estate, and your children will split the other half of the estate.
  • If one or more of your issue are from a parent other than the surviving spouse, then your spouse will receive half and the issue will split to remaining half.Likewise, if you have no issue but your parents are alive, then your spouse will get half of the estate and your parents will get the other half.

If you do not leave a surviving spouse, then your estate is left in the following order:

  • Children
  • Parents
  • Siblings (or their issue)
  • Grandparents
  • Aunts and Uncles (or cousins)
  • Commonwealth of Pennsylvania

It is important to speak with an experienced attorney as the rules are very complex and often confusing.

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No More “Same-Sex Marriage” Marriage Is Marriage, Period

BY RICHARD A. ROANE

The legal and practical implications of same-sex relationships.

On June 26, 2015, the U.S. Supreme Court ruled in Obergefell v. Hodges, 135 S. Ct. 2584; (2015), that the U.S. Constitution requires all states to recognize a marriage between two people of the same sex, and further, that all states must issue marriage licenses for same-sex couples who apply for such licenses. Associate Justice Anthony Kennedy wrote the opinion for the majority in a five-to-four ruling, finding that same-sex couples have a fundamental right to marry as guaranteed by both the due process clause and the equal protection clause of the Fourteenth Amendment to the United States Constitution. For same-sex couples who were married in a jurisdiction that recognized and allowed same-sex marriage and who were living in either a recognition state or one of the 13 prohibition states, their marriages are now recognized under state law. In addition to recognizing these marriages, all states now must issue marriage licenses to same-sex couples who apply to marry. This new recognition means: • These marriages will be recognized throughout the United States, in all states, territories, possessions, and Washington, D.C., plus the 20 (at time of writing) other countries recognizing same-sex marriage. Recognition by certain Native American tribes is restricted. (See “Native American Tribes: More Exceptions on page 14.) • Children born during these marriages should have two legally recognized parents based on the “parental presumption,” regardless of gender or biological connection. • Family law courts should be available to same-sex married couples for resolving issues in dissolution (divorce), custody, child support, spousal support, and property division cases—literally all issues available to heterosexual couples.

 

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