Tag Archive for: PA divorce attorney

Your Family-Owned Business and Divorce

Married couples tend to mix many elements of their lives: friend groups, finances, and hobbies. Some couples go even further and mix their relationship with their careers by running a business together. 

A family-owned business requires unique considerations during a divorce — the two parties aren’t just spouses; they are also business partners. The team at Karen Ann Ulmer, P.C., can help you navigate these legal challenges. 

No Prenup or Postnup? 

The best way to mitigate stress and contention over a family-owned business in a divorce is to create and sign a prenuptial or postnuptial agreement prior to the divorce, agreeing on how the two parties will divide or trade all assets. 

If you do not have either of these documents, you must determine an equitable division of assets during the divorce process. This can be much more challenging, so we recommend hiring an experienced attorney to help you through negotiations. 

Unique Challenges of Family Businesses and Divorce 

Business interests are always tricky to navigate in a divorce, especially if the business owner is the sole income provider. However, a family business owned by both parties presents its own set of considerations. A court must first determine whether the business constitutes marital property and is thus subject to equitable distribution under Pennsylvania law. 

To make this determination, a judge will consider factors like the funds used to start the business and the business’s value before, during, and after the marriage and divorce.  

Who Owns the Business? 

It is crucial to have a complete understanding of who owns the business to determine whether it is a marital asset. For example, if a trust or a previous generation owns the business, and neither party technically owns it yet, it follows different rules for property division. 

Inheritance 

If one party inherited the business or received it as a gift, even during the marriage, the business is considered separate property, not marital property. Additionally, if one party may receive a portion of the business as an inheritance in the future, that portion also counts as separate property. 

Alimony and Child Support 

Many people wonder how the income from a family-owned business will be divided after a divorce. If you are pursuing a divorce, you can use your ex-spouse’s salary for alimony and child support settlements. 

What If the Business Goes Under? 

Some people try to continue co-owning the business after a divorce when considering the division of assets. Others opt to receive a business valuation and have one partner buy out the other’s portion. If you choose to do this, you can receive a lump-sum payment upfront and avoid any financial repercussions if the business goes under. 

There are always complicating factors when pursuing a divorce. Tied-up assets, like co-owning a business, can make an already-challenging process even more complex. Reaching out to a trusted divorce attorney from Karen Ann Ulmer, P.C. can help you navigate dividing a family-owned business during a divorce with confidence. Call or email today. 

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What is the Attorney-Client Privilege in Pennsylvania?

The attorney-client privilege allows a client to prevent the disclosure of some communication between the client and their attorney, their agents, and employees. It is a way to encourage clients and their attorneys to be open and honest with each other because these communications should be confidential. 

But this privilege will not block every kind of communication. Under some circumstances, a client can waive this protection, and disclosure by an attorney could also result in others learning of what was said or written. 

How Does This Privilege Work? 

Pennsylvania law generally protects the confidentiality of certain communications between an attorney and their client. These protections are granted so clients can safely and fully disclose sensitive and possibly damaging information to receive proper legal advice. 

A client can refuse to disclose these communications and prevent others from disclosing confidential communications or information that would reveal a confidential communication. The parties to that communication are not just the client and attorney. They could be: 

  • The client or their representative and the client’s attorney or their representative 
  • The attorney and the attorney’s representative 
  • The client’s representatives or between the client and their representative 

The privilege can be claimed by: 

  • The client 
  • The attorney or their representative at the time of the communication, but only for their client 

The privilege does not cover others who may be harmed by the release. 

What are the Privilege’s Limits? 

The exceptions to allowing some communications to be kept secret include:  

  • If the attorney’s services or advice were sought or obtained to enable or help anyone commit or plan to commit what the client knows, or reasonably should know, was a crime or fraud 
  • Communications relevant to a possible breach of duty by the lawyer to the client or by the client to the attorney 

This confidentiality can be lost if you do certain things or fail to do other things: 

  • You intentionally disclose or agree to disclose the confidential communication’s subject matter 
  • You or your attorney fail to object to the communication’s disclosure during a legal proceeding 

The privilege is not waived if the disclosure is accidental and you and your attorney take reasonable steps to prevent further exposure and to correct the mistaken release. 

How Does This Affect Me? 

If you have retained our services, do not disclose to others any discussions we, our employees, or others we have retained have had. If the opposing party can show you are spilling the beans to others, we will have a hard time arguing to a judge that those are our secret beans and no one else’s. Some things are not anyone else’s business, including conversations with and information provided to or by your attorney. 

This includes not just verbal discussions but anything in writing, whether that is letters, forms, or emails we send you or that you send to us. The possible damage to your case far outweighs whatever benefit you think you may gain. 

Contact Karen Ann Ulmer, P.C., if you have questions about this important topic. Call us at (866) 311-4783 or complete our online contact form today. 

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