Getting divorced? Here’s how your divorce will impact your business

Under NY Law, both parents are ultimately responsible for child support until the child reaches their 21st birthday unless the child is emancipated or dies. Emancipation is a complete severance of the parental relationship that occurs when the child voluntarily withdraws from the parental control of the guardian. Emancipation occurs when the child marries, joins the military, or attains independence from employment.

NY has adopted a uniform child support award system which is not based on need but rather a fixed percentage of both the parents incomes as per the most recent tax return.

The child support formula is applied to the parents combined income up to the first $154,000 (154K), and then prorated between the spouses in the same proportion as each parents income is to the combined parental incomes.

In addition, the formula is based on the number of children to be supported. It is completed by multiplying the combined parental income by:

17% for one child

25% for two children

29% for three children

31% for four children

35% or more for five or more children

An Example of the calculation:

John and Jane Doe were married happily until Jane stepped out of the marriage and did the dirty with the pool boy prompting a divorce. They had two children together, Bonnie and Clyde. John earns 80k annually and Jane earns 40k, for a combined total of 120k parental income. Because there are two children, the percentage of child support allocated to the children is 25%. The combined income is 120k, 25% of the income is 30k; that is the total amount allocated to child support.

Since John earns 2/3 of the combined income, he’ll pay 2/3 of the 30k which equates to 20k. Jane is responsible for the other 10k.

***The court can deviate from this formula if it would be: Inappropriate, unjust to either spouse, or where spouses have opted out of the formula either in open court or a pre-marital agreement as discussed in one of my prior posts. Courts can also deviate from the formula if the child has special needs.

Although child custody is shared between both parents, it is the parent who has physical custody of the child for a majority of the year (183 overnight visits during the year) that is entitled to receive the child support payments from the other parent.

When parents share equal time with the child, then the parent with the greater income must pay the other parent child support because it assures the child will receive the max benefit of the parents incomes.

**Parents may be required to pay some additional costs such as, medical insurance and daycare.

Therefore, both parents are responsible for their proportionate share of costs in raising their children based on the statutory guidelines and discretion of the court.

Call today for a consultation regarding Divorce or Marital Agreements.
Joe Cammarata Esq.

Getting a divorce will impact every facet of your life, not excluding the business you struggled to grow into success. That means your ex might emerge as your business partner, which is something you might not want.

If you’ve been wondering how divorce will affect the ownership of your business, by all means, read on!

How divorce can affect your business

The fact is, divorce will put you in a dreadful condition where you could end up being in a partnership business with your ex. In a community property state, you may have to give up half of the business or perhaps a similar amount in equitable distribution states. 

Instead of giving up half of your business, you can decide to give your ex half of your marital estate so that you get to keep your business. After all, this is a business you worked pretty hard to create and grow, right?

Another plausible alternative is the possibility of liquidation of your business while splitting the proceedings with your ex. If the business caters to the family welfare, the court might be reluctant to tread such a route.

However, what if what you dread the most happens? What if your spouse decides to get back at you by calling your customers and denting the reputation of your business? To ensure that such a thing never happens, it is important to put plans in place.

Can divorce cost you your business?

If you had started your business before your marriage, then getting a divorce might not affect it since it is separate property. However, where problems often arise is when the business loses its separate status during the marriage.

It can happen in several ways, such as the business increasing in value during the marriage. In this case, the increase can be subjected to an equal or equitable distribution.

If your ex had contributed to the business in any way or form, your business becomes marital property subject to division. 

Should you hire a divorce lawyer?

There is no reason you shouldn’t work with an experienced attorney, especially since your ex is likely to have one. Divorce is never a pleasant process, and having reliable legal counsel and a representative will help your mental state.

Not forgetting, a divorce attorney who is versed with the ins and outs of the legal system will fight to ensure your interest is protected. Regarding your business, a divorce attorney will also help in ways that protect your business in the future, like drafting a prenuptial agreement, a postnuptial agreement, or simply getting a buy-sell agreement.

If You’re currently battling with saving your business from the claws of divorce, your best line of action is getting in touch with us. Our team of experienced attorneys is the best, and we fight to ensure your interests are protected. Call 718-477-0020 or fill out the contact form to begin.