After 14 years of marriage and two children, the cost of a divorce is crippling the business and absorbing many resources. Married to a spendthrift for too many years a business owner elected to return to his frugal ways by eliminating his most expensive life choice: his wife. Now in the midst of a divorce he is finding that child support, spousal support and paying profits from the business to his soon to be ex-wife are drowning him financially. This is frequently the result of poor planning and poor representation.
While a divorce absolutely impacts the budgets of both parties, the economic pain is appropriately shared. If all the proper factors are considered then both sides of the divorce suffer financially but neither one proportionately more than the other. Actually, the primary wage earner customarily has more of the after tax income than the supported spouse if the support orders and arrangement are handled by an experienced family law attorney. The tax impact of support should also be considered to minimize the amount paid over to the government in income taxes. Re-aligning the assets can cause fiscal stress because the division of the assets in California is to be equal.
If there is a lot of value in the business and not much value in the house then the business operator will have to pay a hefty ‘equalizing payment’ to his spouse so each ends up with an ‘equal’ division of the assets. On the other hand, if the house has lots of equity value and the business has little value then the spouse who receives the house may have to pay the other spouse a substantial amount to ‘equalize’ the property division. When this amount is unattainable the house is frequently listed, marketed and sold on mutually agreeable terms. The proceeds of the sale are then used to ‘equalize’ the division of the community estate.
A family law attorney can help you determine whether the house and business is community or separate property and whether the separate property of one spouse was used to acquire or improve the community asset. Separate property down payments, improvements and reductions of principal reduce the ‘community’ value and entitle one spouse to a right of reimbursement. These rights may represent substantial dollars which do not have to be ‘equalized’. The party who has the right of reimbursement is awarded that sum from that asset without offset and charge. One of the experienced attorneys at Burke & Domercq, APC, APC can help you answer these questions, analyze your circumstances and guide you through the divorce process.
Their office is located in the Village of Carlsbad and is convenient to Encinitas, Vista, Oceanside, San Marcos and most all of North County San Diego. Call to schedule an appointment. Visit us at www.dburkelaw.com