Can You Avoid Getting Lawyers Involved in Your Divorce?

Divorce lawyers – could easily be one of the most hated groups of individuals out there (second only perhaps to “lawyers” in general…)

So, it’s no wonder many separated or divorcing spouses are reluctant to get lawyers involved.  And I get it – many divorce and family lawyers are overpriced and needlessly aggressive.

There are certainly plenty of horror stories involving long, drawn, out, painful and astronomically expensive divorces.  And in the media, there’s no shortage of news involving crooked lawyers.  Not to mention TV shows and movies starring especially sleazy-looking divorce lawyers (greased back hair and all…)

Naturally, if you’re separated or considering divorce, you might want to avoid divorce lawyers at all costs  (no pun intended…).  Perhaps you prefer to try and work out a divorce agreement on your own or head to mediation (check out this article on to tell if divorce mediation is right for you).

The truth is, when it comes to choosing any professional, whether doctor or surgeon, accountant, plumber, contractor or anyone else, including a lawyer, there are good ones and there are bad ones.  The good ones will truly help you and get you to a better place.  But the bad ones can make your life a living hell.

The same is true with divorce lawyers.  And unfortunately, it’s far more often the bad experiences we hear about.  So, when choosing a lawyer to handle your divorce, it’s important to choose wisely.

Because even if you prefer to work things out between you and your spouse, it’s important not to overlook key issues and provisions that can land you in court after the divorce.  The most commonly overlooked areas generally involve alimony, child support, and college expenses.

By the same token, when it comes to things like amount and duration of alimony, and dividing retirement plans, premarital assets, inheritances, and businesses, you’ll need to defer to New Jersey law to determine what’s fair.

And overlooking such key issues not only can harm you financially, it can often require costly and unpredictable legal action to correct.  And perhaps most important is making sure your children’s needs in the divorce are properly taken care of.

It can be far more expensive to pay an attorney to try and fix a bad divorce judgment after the fact than to have a competent family lawyer in your corner in the first place.

Hiring the right divorce and family lawyer can give you the peace of mind that your divorce is being properly handled from the start so you can avoid costly mistakes you can regret for the rest of your life.

Also, a competent divorce and family lawyer can draft up your divorce agreement in the proper legal form so that it’s properly incorporated when the court enters your divorce judgment.

For more information about how to settle your divorce out of court or for a personalized consultation, please click here.

 

Four Actions to Take Now to Protect Your Family Business in Divorce

If you own a family business with other family members, this article gives you 4 ways to protect the family business if one family member-owner were to get a divorce.

In New Jersey, the spouse of a family business owner could acquire ownership rights in the business simply by being married.  Therefore, the time to protect your family business is now.  Because once the divorce papers are filed, it could be too late, risking the profitability and future successful operation of the business.  Below are 4 important actions to take now to protect the family business:

1.        Put it in writing.

The shareholders’ or similar family business agreement should clearly set forth each family member’s specific or percentage share in the business.

Significantly, your family business agreements should also include a provision that addresses the interest, if any, those non-owner spouses have in the business and what happens to stock or ownership interests in the event of divorce.

Ideally, family business agreements would require all owners to obtain their non-owner spouses’ written agreement to be bound by such provisions.  These are often called Agreements to be Bound.

2.        Put it in writing again.

Where an Agreement to be Bound is not feasible or insufficient, consider a prenuptial agreement that provides for the waiver by the spouse of an interest in the family business.

Alternatively, consult with a reputable business and estate planning lawyer to consider whether an estate planning device, such as a trust, would be more effective.

It’s important that your business lawyer works with your divorce and family lawyer so that all legal requirements are met and to ensure your family business is sufficiently protected.

 3.        Limit the non-owner spouse’s role.

It’s generally best for non-owner spouses not to be involved in the operation of the family business.  This can help defeat the spouse’s claim to have contributed to the profits of the business and receive a greater share in the business.

4.        Keep it confidential.

Most divorces in New Jersey are settled by way of a divorce agreement (typically referred to as a “Marital Settlement Agreement”).  Significantly, Marital Settlement Agreements are considered public records.

Therefore, to the extent the Marital Settlement Agreement identifies the value of the family business, names of officers, and additional confidential business details, a confidentiality provision should be included.

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Three Things No One Tells You About Divorce Mediation

Divorce mediation is when you and your spouse enlist a neutral third party to help you agree on things like child custody, parenting time with your children, alimony, and division of marital assets and debts.  Divorce mediation is voluntary, so either you or your spouse can withdraw at any time.

And divorce mediation can often save you money on lawyer fees.  Because once a divorce complaint is filed with the court, you often have to comply with court-mandated timelines and appear for mandatory court settlement conferences, which your lawyer will charge for.

But before deciding if divorce mediation is right for you, here are 3 things you need to know first that no one tells you.

1.        In most cases, you’ll still need a lawyer.

I often hear people tell me, “we want to avoid lawyers and keep things amicable by going to mediation.”  And that’s partly true.  Divorce mediation can definitely help keep things amicable.  And most lawyers generally charge much less if you come to them with a mediated agreement.  But agreements reached in divorce mediation generally are not legally binding.

Instead, the divorce mediator typically draws up a document called a “Memorandum of Understanding.” You take that to your lawyer to draft up the legally binding agreement called a “Marital Settlement Agreement” and file the required legal documents with the court to enter your divorce.  Importantly, your lawyer can also suggest certain provisions in the Marital Settlement Agreement to protect you and keep you out of court after the divorce.

2.        Divorce mediators cannot give legal advice to either you or your spouse.

Only a lawyer can give you legal advice about how your decisions in divorce mediation will affect you.  Your lawyer can also advise you during mediation so you can make informed decisions that impact your legal rights and obligations.

3.        Divorce mediation can be a waste of time and money if both spouses don’t have similar knowledge about the marital finances.

It’s common in many marriages for one spouse to know more about the marital finances than the other.  But in divorce mediation, you’ll both be making decisions about such things as how to divide the marital assets and how much alimony or child support, if any, is appropriate.

So, unless you and your spouse are both relatively familiar with the incomes, assets, and debts of the marriage, or you have joint bank accounts or other assets in joint names, divorce mediation may not be productive – or even worthwhile.

The exception is where the spouse with the greater knowledge, access, or earnings will be completely transparent and forthcoming in disclosing all assets and financial statements.

This is more likely to happen when both spouses (1) have accepted the divorce is going to happen, (2) are able to make the necessary commitment to reaching an agreement; (3) are each willing to try to see the other’s perspective, and (4) are able to focus on achieving their most important goals while letting go of some of the less significant issues.

Admittedly, none of this will be easy, but it will be worth it when you, instead of the court, are in charge of the decisions for your children and your financial future.

To find out more about how you can benefit from divorce mediation, please call or click here to schedule a personalized consultation or email me directly at mhart@michelehartlaw.com.

The Secret to Successful Family Business Negotiations

Family members in business together often engage in negotiations that vary from negotiations between family members and other employees to those with customers, vendors, or investors.

And the stakes can run high in terms of risk of the number of dollars or even the future of the family business.  So how can you, as a family business owner, best position yourself for success in your next negotiation?

You might simply remember two words – Be Prepared.  In the words of Benjamin Franklin, “By failing to prepare, you’re preparing to fail.”

The best negotiators are the ones best prepared.  They have a plan for the negotiation before it even starts.  And the more you know, the better prepared you will be.

Below is a simple checklist to up your game in your next family business negotiation and show up prepared for success.

1. What do I ultimately want to achieve in this negotiation?

List your goals and rank them in order of importance.  Identify which goal would be ideal to achieve.  Set your aspiration goals high (though realistic) and you’re more likely to get a better deal.

Notice this requires more than just having a goal to get the best deal possible because the other side will want that too.

2. What is my best alternative to reaching a deal in this negotiation?

Identify your best option if you were to walk away from this deal.  This is referred to as your BATNA (Best Alternative to a Negotiated Agreement).

Or you can call it your Plan B.  When negotiating with other family members, however, it’s important to consider the value of the family relationship when identifying your best alternative.  For example, choosing a non-family member over your daughter for a key executive position might be your best alternative, but not if it comes with a price tag of alienating your daughter.

3. How much time do we have for negotiations?

Are there any deadlines looming?

4. What do I have that the other side needs?

This might be your authority or expertise, for example.

5. What is my absolute bottom line?

This is the point where you would rather walk away than agree.

6. What are the other side’s interests?

Specifically, when negotiating with other family members, be attuned to any underlying jealously or competition that can arise from longstanding resentment.

Also, how important might each interest be to them?  For example, one family member might have a key interest in keeping the peace while another, not so much.

For any business negotiation, it’s often valuable to do some homework by perhaps searching online or asking trusted colleagues with knowledge about your counterpart’s business or industry.

7. How might my past relationship with the other party affect this negotiation?

Address any underlying family tensions right away.  Otherwise, any underlying resentment can easily spill over into negotiations and kill a potential deal.

It can often be helpful to bring in a mediator as a neutral third party to manage and isolate underlying emotions and facilitate an optimal deal for all parties.

8. What objective criteria or precedent supports my preferred position?

Objective criteria refer to a fair, independent standard.  Ideally, objective criteria such as market value, expert opinion, or standard industry practice should be agreed upon by all parties at the outset of the negotiation.

9. Do we need to involve any third parties?

In a potential sale of the family business or one member’s interest, for example, you might need an accountant to calculate values.  You can also call in a family business mediator to keep you out of court.

The above is part of this complete checklist posted by the Program on Negotiation at Harvard law school.

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