Cathy C. Hunt, attorney with Gailor, Hunt, Jenkins, Davis & Taylor in Raleigh shared information with Shop Talk about marrying and divorcing while owning a small business. Here are her edited comments:

Generally, if a person owns a business before marrying, that person will keep the business after a divorce.

It will be valued as of the date of the marriage. Any increase in value to the date of separation will be considered marital property, and the non-owner spouse will take another asset that is equal in value.

If spouses start a business together, one spouse is usually more involved than the other. The spouse who can run the business without the other generally gets the business in a divorce. The other spouse is awarded assets of the same value.

The best way to protect the business is with a prenuptial agreement, which is difficult to overturn if drafted properly. It’s best for both parties to obtain an attorney and sign the agreement at least 30 days before marrying.

If an owner does not have a prenup, the increase in value of the business is going to become a part of the marital estate and will be distributed in the event of divorce.

Parties can get a post-nuptial agreement that will designate what will happen with the business and other assets if there is a divorce.

If an owner spouse actively works in the business that the other spouse owned before marriage, that spouse will be entitled to the increase in value of the business from the time of marriage until separation.

It is uncommon for a business to be sold because of divorce because it is the source of income needed to pay expenses.

Divorces are costly. Valuation of a business can run from $10,000 to $60,000. Legal fees vary depending on all of the issues that are involved; the business is just one factor in a divorce.

Watch our video on YouTube Business in Divorce North Carolina

By: Cathy Hunt

Leading Family Law Attorney

If you are the owner of a closely held business and you are going through a divorce you probably have a number of questions. Owning a closely held business necessarily complicates your divorce. Ownership of a closely held business creates unique discovery, classification, valuation as well as distribution issues. The first part of this series will focus on unique discovery issues that may arise where the owner of a closely held company is going through divorce.

Content of Discovery – As an owner of a closely held company you may be surprised at the amount of information that will be requested in discovery. Typically, the request will include five years of financial information which includes tax returns, balance sheets, and profit and loss statements. However, it may also reasonably include compensation of all employees and officers; key-man insurance policies, all company contracts, and customer lists.

Confidentiality – Many owners of closely held businesses object to the production of certain company information on the grounds of that the information is confidential. What is considered confidential is generally speaking more broadly defined than most owners would like. In addition, in most cases the confidential information is discoverable following entry of a confidentiality agreement or a confidentiality order.

Control – During divorce, if one party has been primarily involved in the business he or she will have the easiest access to the documentation. Typically, this means the other party may have to spend additional time and money to obtain the information needed. It is not uncommon to have to seek the court’s assistance to compel the production of necessary information. In most cases there will be a discovery order which sets out deadlines for requesting this information as well as deadlines for the production of expert witness reports. In cases where there is a closely held business involved it is imperative to work with an attorney who is experienced in these matters to ensure that the necessary information is requested properly from the party who is in control of the documentation to ensure that discovery deadlines are met.

Continued Operation – Another unique issue in cases involving closely held businesses is what happens to the company’s operation pending the divorce. In cases where only one party has been actively involved in the business, the court will likely allow that party to continue operating the business unless issues may arise regarding that party’s business judgment pending the divorce. In cases where both parties have been actively involved in the day to day operations of the business, the court may need to decide who will handle the day to day operations if the parties are unable or unwilling to continue working together.

If you are the owner of a closely held business the best thing you can do to protect your business during divorce is to hire an attorney experienced in complex property distribution cases; someone who understands the unique discovery issues that arise in cases involving closely held businesses.

Contributor: Carole Gailor, a divorce lawyer with Raleigh based Family Law firm in North Carolina. Gailor, Wallis & Hunt, P.L.L.C. For more information contact: Raleigh, North Carolina Family Law Firm, Gailor, Wallis & Hunt at 1101 Haynes Street, Suite 201, Raleigh, N.C. 27604. Tel: 919-832-8488 or go to http://www.gailorwallis.com

Disclaimer: The information contained in this article is intended as a general guide and is not to be used as legal advice by Gailor, Wallis & Hunt, PLLC. You may contact North Carolina Family Lawyers Gailor, Wallis & Hunt, PLLC, a full service divorce law firm, at 919-832-8488 or 910-509-7223.

(Photo: http://photos.prnewswire.com/prnh/20121004/CG86780)

The United States Constitution protects the fundamental right of parents to make decisions concerning the care, custody, and control of their children; however, if a legal parent, whether biological or adoptive, acts in a manner that is inconsistent with his or her constitutionally-protected status, the parent may lose this protected status and may find him or herself in a custody dispute with a non-parent, like a third party caregiver. Whether a parent has acted in a manner inconsistent with his or her constitutionally- protected status must be made on a case-by-case basis. The parent’s conduct and intent are relevant in making this determination.

In such cases, the court would consider the reason for the relinquishment of custody. Was the parent suffering from poor health? Was he or she required to serve in the military? Was he or she unemployed and trying to find work? First and foremost, the parent needs to inform the caregiver that the relinquishment of custody is temporary and that the parent fully intends to resume custody once he is back on his feet. Second, the parent needs to maintain consistent contact with the children. While in-person visits are preferable, if such visits are not possible, then daily telephone or other electronic contact with the children should be made. The parent should also continue to provide financial support for the children to the extent that he/she is able. One option is to set up a custodial bank account for the child with the parent and third party caregiver as custodians. In addition, the parent should ask the caregiver to keep him or her informed with respect to the child’s daily activities including any medical or dental appointments, extracurricular activities, and school functions, and the parent should attend these activities as much as possible.

If you are considering allowing someone else to care for your child for an extended period of time, it is important to consult with a professional who is skilled in this area to help guide you through the process.

Jaime Humphries Davis is a Board Certified Family Law Specialist and partner with the family law firm of Gailor, Wallis & Hunt, PLLC. She can be reached at 919-832-8488, Jdavis@gwhlaw.com, or visit http://www.gailorwallis.com

Media Contact:

Jamie Humphries Davis, Gailor, Wallis & Hunt, PLLC, 919-832-8488, Jdavis@gwhlaw.com

News distributed by PR Newswire iReach: https://ireach.prnewswire.com

SOURCE Gailor, Wallis & Hunt, PLLC

/EINPresswire.com/ Raleigh, NC – The start of summer brings with it neighborhood barbecues, lazy pool days, and of course, the family vacation. Many of us reflect fondly on childhood memories of time spent at the beach or the lake with our parents. For separated and divorced parents, however, the proverbial “family vacation” can present a whole new set of challenges. Will you travel alone with the children, or will you invite your ex? Do you both want to travel with the children during the same week? Who pays? Will new significant others be invited? Are you allowed to travel out of state? Do you have the kids’ passports? By following a few simple tips, the family vacation can still go off without a hitch, resulting in a memorable trip for all.

1. Read your Separation Agreement or Custody Order AGAIN. Once you signed it or the judge rendered her decision, you were probably hoping that everything was finished and you would never have to look at the agreement or the court order again; however, if you and your ex-spouse have a Separation Agreement or a Court Order for child custody, read it again. It likely contains the answers to many of your questions with respect to the do’s and don’ts of traveling with the kids this summer. A quick reading of these documents will get you up to speed on the rules of the game and likely save you many headaches as you plan your vacation.

2. Decide who is going. It may sound simple, but one of the first decisions you need to make is whether you intend to invite your ex to accompany you on the trip. If you and your ex-spouse still have a good relationship with one another, a vacation together may work out just fine; however, more often than not, the answer to this question will be no. If you decide not to invite the ex, are you going to invite your new significant other? Before answering this question, make sure you have followed Tip #1 above and consulted your child custody paperwork to make sure that having your significant other accompany you on a vacation with the children is permissible.

3. Pick your vacation dates as soon as possible. Nothing will mess up your vacation plans quicker than learning that your ex has scheduled a vacation with the kids during the same week for which you have purchased non-refundable airline tickets and pre-paid a resort suite. To avoid such complications, notify your ex-spouse as soon as possible with respect to when you wish to schedule your vacation with the children. Many agreements and court orders require parents to notify one another by early spring of which weeks they intend to exercise their summer custodial time with the children.

4. Give a copy of your itinerary to your ex-spouse. Once your vacation plans with the children have been finalized, give a copy of your itinerary to your ex. While he or she should not disrupt your fun time with the kids, he or she does need to know how to contact you and the children in case of an emergency.

5. Make sure you have all the travel documents you need for the children. If your vacation involves travel outside of the United States with the children, make sure you have all of the appropriate travel documents for the children.

The consent of both parents is needed to apply for a passport for a minor, and if you and your ex are not on good terms with one another, he or she could foil your summer trip to Paris by refusing to give his or her consent to obtain a passport for your child. In such cases, court intervention may be necessary to ensure the other parent’s cooperation; thus, planning ahead is critical.

6. Establish a call schedule. While you are away with the children, the other parent should be able to have reasonable telephone or other electronic contact with the children. It is a good idea to go ahead and establish a schedule of when these calls or Skype sessions will occur before you leave for your vacation.

7. Put it in writing. In addition to giving your ex-spouse a copy of your itinerary, once you have established when you will be traveling, where you will be staying, and when the other parent will be contacting the children while you all are on vacation, put it in writing. Memories often fade, and you will be ever so thankful that you sent that confirmation email to your ex-spouse when he or she later tries to say that you did not

keep him or her informed of your travel plans.

Jaime Humphries Davis is a Board Certified Family Law Specialist and partner with thefamily law firm of Gailor, Wallis & Hunt, PLLC. She can be reached at 919-832-8488, Jdavis@gwhlaw.com, or visit www.gailorwallishunt.com.

Brought to you by Raleigh Divorce Lawyer Jaime H. Davis

If you are the owner of a closely held business and you are going through a divorce you probably have a number of questions. Owning a closely held business necessarily complicates your divorce. Ownership of a closely held business creates unique discovery, classification, valuation as well as distribution issues. The first part of this series will focus on unique discovery issues that may arise where the owner of a closely held company is going through divorce.

Content of Discovery – As an owner of a closely held company you may be surprised at the amount of information that will be requested in discovery. Typically, the request will include five years of financial information which includes tax returns, balance sheets, and profit and loss statements. However, it may also reasonably include compensation of all employees and officers; key-man insurance policies, all company contracts, and customer lists.

Confidentiality – Many owners of closely held businesses object to the production of certain company information on the grounds of that the information is confidential. What is considered confidential is generally speaking more broadly defined than most owners would like. In addition, in most cases the confidential information is discoverable following entry of a confidentiality agreement or a confidentiality order.

Control – During divorce, if one party has been primarily involved in the business he or she will have the easiest access to the documentation. Typically, this means the other party may have to spend additional time and money to obtain the information needed. It is not uncommon to have to seek the court’s assistance to compel the production of necessary information. In most cases there will be a discovery order which sets out deadlines for requesting this information as well as deadlines for the production of expert witness reports. In cases where there is a closely held business involved it is imperative to work with an attorney who is experienced in these matters to ensure that the necessary information is requested properly from the party who is in control of the documentation to ensure that discovery deadlines are met.

Continued Operation – Another unique issue in cases involving closely held businesses is what happens to the company’s operation pending the divorce. In cases where only one party has been actively involved in the business, the court will likely allow that party to continue operating the business unless issues may arise regarding that party’s business judgment pending the divorce. In cases where both parties have been actively involved in the day to day operations of the business, the court may need to decide who will handle the day to day operations if the parties are unable or unwilling to continue working together.

If you are the owner of a closely held business the best thing you can do to protect your business during divorce is to hire an attorney experienced in complex property distribution cases; someone who understands the unique discovery issues that arise in cases involving closely held businesses.

Contributor: Carole Gailor, a divorce lawyer with Raleigh based Family Law firm in North Carolina. Gailor, Wallis & Hunt, P.L.L.C. For more information contact: Raleigh, North Carolina Family Law Firm, Gailor, Wallis & Hunt at 1101 Haynes Street, Suite 201, Raleigh, N.C. 27604. Tel: 919-832-8488 or go to http://www.gailorwallis.com

Disclaimer: The information contained in this article is intended as a general guide and is not to be used as legal advice by Gailor, Wallis & Hunt, PLLC. You may contact North Carolina Family Lawyers Gailor, Wallis & Hunt, PLLC, a full service divorce law firm, at 919-832-8488 or 910-509-7223.

North Carolina, like New York, grants judges broad discretion to determine child support in cases where the parties’ income exceeds guideline amounts.  In these cases, North Carolina courts must determine the reasonable needs of the child.    Specifically, “payments ordered for the support of a minor shall be in an amount as to meet the reasonable needs of the child for health, education, and maintenance, having due regard to the estates, earnings, conditions, and accustomed standard of living of the child and the parties….”  N.C. Gen. Stat. 50-13.4 (2012).  However, “reasonable” is a relative word.   Many would consider a monthly request for $47,000.00 to be excessive for child support.   In North Carolina, judges may use their own discretion to determine if an expense is excessive.   Accordingly, in North Carolina expenses related to private school, domestic help, and vacation homes may be excluded from a child’s reasonable expense notwithstanding that the child may have enjoyed these amenities throughout the marriage.   For parties seeking child support in high income cases it is important to remember that judges may be concerned that a request for child support is really alimony is disguise.   Therefore, before offering evidence of detailed expenses it is important to isolate child expenses from other family expenses in high child support cases.

Contributor:  Carole Gailor

Carole S. Gailor, a Raleigh Family Law Attorney is a North Carolina Board Certified Family Law Specialist with the Raleigh, North Carolina Divorce Law Firm of Gailor, Wallis & Hunt, P.L.L.C.   For more information contact:  Raleigh, North Carolina Family Law Firm, Gailor, Wallis & Hunt at 1101 Haynes Street, Suite 201, Raleigh, N.C. 27604. Tel:  919-832-8488 or go to http://www.gailorwallis.com

Disclaimer: The information contained in this article is intended as a general guide and is not to be used as legal advice by Gailor, Wallis & Hunt, PLLC.   You may contact North Carolina Family Lawyers Gailor, Wallis & Hunt, PLLC, a full service divorce law firm, at 919-832-8488 or 910-509-7223.

In many cases the marital residence is one of the most valuable assets of a divorcing couple’s estate. Now more than ever couples who are separating are faced with difficult decisions regarding what to do with their marital residence. Traditional options like immediately selling the marital residence or having one party buy the other party out may not be possible or desirable given current economic conditions. Accordingly, some parties are electing to hold on to the marital residence as tenants in common and wait for the market to recover. In such cases, it is important for the parties to understand the responsibilities and potential tax ramifications.

There may be serious capital gains ramifications depending upon the timing and circumstances of a future sale or transfer. In order to exempt up to $250,000.00 of capital gains (or up to $500,000.00 if you are married filing joint), you must satisfy the ownership and use tests. In order to satisfy the ownership and use tests, a party must have owned the home and lived in the home as their principle residence for at least two years during the five year period ending on the date of the sale. Therefore, if Husband and Wife separate and sell their marital residence quickly, they may both still satisfy the ownership and use tests. Assume Husband and Wife purchase property as tenants by the entirety and use this property as their principle residence for two years before Husband moves out and the parties separate. If they sell the marital residence quickly and are still married on the last day of the tax year they both still meet the ownership and use tests and can exempt up to $500,000.00 of capital gains if they file a joint married return.

The treatment of capital gains tax can be drastically different if sale of the property is delayed. Assume that Husband and Wife divorce but continue to own the former marital residence as tenants in common. Following the parties’ separation, Wife lives in the residence for three and a half years prior to its sale. Since they continue to own the property as tenants in common, the gain is reported with each party receiving fifty percent. However, Husband no longer satisfies the use test and will not qualify for the up to $250,000.00 exemption.

The above is just one example of the many tax ramifications which couples may face when deciding what to do with their former marital residence. Accordingly, prior to the sale or transfer of real property you are strongly advised to seek advice from an attorney as well as an accountant with experience dealing with these issues.

Contributor:

You can reach Raleigh Divorce Lawyer Cathy Hunt at CHunt@gwhlaw.com.

For more information contact: Raleigh, North Carolina Family Law Firm, Gailor, Wallis & Hunt at 1101 Haynes Street, Suite 201, Raleigh, N.C. 27604. Tel: 919-832-8488 or go to http://www.gailorwallis.com

Disclaimer: The information contained in this article is intended as a general guide and is not to be used as legal advice by Gailor, Wallis & Hunt, PLLC. Whether or not you may be entitled to take action in regard to the information addressed in this article can only be determined after a thorough review of the facts and circumstances of your case. You may contact North Carolina Family Lawyers Gailor, Wallis & Hunt, PLLC, a full service divorce law firm, at 919-832-8488 or 910-509-7223.

In certain circumstances you may be able to limit how much contact your children have with your spouse or former spouse’s new romantic interest. In an initial custody determination, you can offer evidence that your spouse is exercising poor judgment by introducing your child[ren] too soon to his or her paramour or to someone who is not suitable to be around your child[ren]. If there is already a custody order already in place you will need to demonstrate to the court that there has been a substantial change of circumstances that warrants a modification to custody.

A more common way to limit this type of contact is by inclusion of specific provisions in a separation agreement. Two common provisions are a “right of first refusal” provision and a “no overnight visitation” provision. A “right of first refusal” provision would give both parents the right to be notified when the other parent was unable to care for the child and an option to care for the child in lieu of a third party. A “no overnight visitation” provision would prohibit a parent from having overnight visitation with someone not related by blood or marriage. In addition, despite obvious enforcement difficulties, you could include other specific provisions to limit contact between a parent’s new romantic interest and their child[ren] (ie. a provision which prohibits introduction of the children to any new romantic interest until divorce or some other agreed upon time).

Whether you can successfully limit how much time your children are with your spouse or former spouse’s paramour is dependent upon the facts and circumstances of each case. However, in general it is important for a parent to realize that separation necessarily means some loss of control over the parenting decisions of the other parent and that in general attempting to control the other parent following separation is wasted energy.

Contributor: Kimberly A. Wallis – Kimberly Wallis, a Raleigh Family Law Attorney is a North Carolina Board Certified Family Law Specialist with the Raleigh, North Carolina Divorce Law Firm of Gailor, Wallis & Hunt, P.L.L.C. For more information contact: Raleigh, North Carolina Family Law Firm, Gailor, Wallis & Hunt at 1101 Haynes Street, Suite 201, Raleigh, N.C. 27604. Tel: 919-832-8488 or go to www.gailorwallishunt.com.

Disclaimer: The information contained in this article is intended as a general guide and is not to be used as legal advice by Gailor, Wallis & Hunt, PLLC. Whether or not you may be entitled to take action in regard to the information addressed in this article can only be determined after a thorough review of the facts and circumstances of your case. You may contact Raleigh Family Lawyers Gailor, Wallis & Hunt, PLLC, a full service divorce law firm, at 919-832-8488 or 910-509-7223.

Child Support in North Carolina: Part II

In considering child support in North Carolina, the court looks predominately to the biological parents of a minor child to provide his or her support. Under North Carolina law, biological parents have a legal duty to provide for the reasonable needs of their child. There are only two instances where the court can look to a third party for the support of a minor child: 1) when an individual or organization has voluntarily agreed to stand in loco parentis for a child, and 2) when the biological parent of a child is an unemancipated minor.

In loco parentis is a Latin phrase that means “instead of a parent.” A common example of an individual standing in loco parentis is a stepparent. Although a stepparent does not have an absolute duty to provide for the support of a stepchild, he or she may assume a duty of support by voluntarily acting in loco parents. When an individual or organization acts in loco parentis, it means that the individual or organization has assumed the functions and responsibilities of a parent as if the individual or organization was the biological parent of the child. For instance Courts have found that a stepparent who has voluntarily accepted a stepchild in to his or her home and acted as if he or she were the parent of that child, taking actions such as listing the child as a dependent or providing the child with military identification, has stood in loco parentis as to that child. In order for North Carolina to recognize and enforce a support obligation by a non-biological parent of a child, the law requires that the individual or organization assume the support obligation in writing. The writing must be acknowledged by the individual assuming the obligation of support in the presence of a certifying officer as defined in the North Carolina General Statutes. Without a writing which conforms with the required formalities, a judge cannot order a third party to pay for the support of a minor child.

Despite this general rule that an individual may not be ordered to pay for the support of a non-biological minor child without first assuming the obligation for support in writing, there is one exception. This exception arises when the biological parents of a minor child requiring support are themselves unemancipated minors. In cases where one or both of the parents are unemancipated minors, North Carolina law permits the judge to look to the grandparents of the minor child of the unemancipated minors to share the support obligation.

The grandparents’ duty of support is to be shared with that of the minor parents and is independent of whether their own unemancipated child is the custodial or non-custodial parent of the minor grandchild requiring support. Under this scenario, the grandparents continue to share in the financial responsibility associated with the minor grandchild until both of the minor parents’ have reached 18 years of age or become emancipated. In situations where only one parent of a minor child requiring support is an unemancipated minor at the time of conception, North Carolina law provides that both sets of grandparents are liable for any child support arrearages owed by the adult parent until the unemancipated minor parent reaches the age of 18 or becomes emancipated. In determining each individual’s share of the child support obligation, the judge may take into account each party’s ability or inability to provide support and then order one or more of the above mentioned parties to share the child support obligation of the minor child.

In North Carolina, unless an individual or organization has assumed financial responsibility for a minor child in writing with the required formalities or one or both of the parents of a minor child for which support is sought is an unemancipated minor, a court cannot look to a third party to provide for the minor child. In situations where an individual or organization has voluntarily assumed a duty of support in writing, the individual or organization standing in loco parentis is only secondarily liable to the support of the minor child. To hold otherwise would place a stricter duty of support on an individual standing in loco parentis than the biological parents of a child. For example, where a former stepparent has assumed an obligation of support in writing which meets the required formalities, the Court must first look to the biological parents of the child to meet the needs for the child. If, and only if, the biological parents are unable to meet the needs of the child, may the Court require the previously mentioned stepparent to fulfill his or her obligation to support the minor child. Therefore, when a court orders support of a minor child, the court must first look to the biological parents of the child to provide for the reasonable needs of the child and can only look to a third party for support if the biological parents of the child requiring support cannot provide any support for the minor child or the minor child’s needs exceed what the natural parents can provide.

Dealing with a separation and divorce can be difficult, especially when child custody is involved. The holidays can present a whole new set of challenges for separated and divorced parents. In addition to developing a regular custodial schedule for the children, parents must also decide where and with whom their children will spend their holiday time now that mom and dad live in two different houses. In thinking about a schedule that will work for the new family unit, it is important to consider several factors. First, to the extent possible, the children’s holiday traditions should be preserved. For example, if throughout the parties’ marriage, the children had Thanksgiving lunch with their paternal grandparents, and Thanksgiving dinner with the maternal side of the family, the parents may want to consider implementing a visitation schedule that allows both parents the opportunity to take the children to their respective family’s holiday activities.

Another issue that often arises is whether parents should alternate major holidays with the children or attempt to divide each holiday period. In determining the preferred schedule, parents should keep in mind whether either parent may need to travel out of state with the children to visit extended family for the holidays. If that is the case, parents may prefer a schedule that allows them to alternate various holidays on an annual basis, rather than try to divide each individual holiday. For example, rather than attempting to divide Thanksgiving Day, parents may instead choose to alternate the entire holiday weekend such that dad has custody of the children from after school the last day preceding the holiday weekend until the following Sunday in even numbered years, and mom has this same time with the children in odd numbered years.

Typically, for the major holidays such as Christmas or Hanukkah which often coincide with a longer break from school, parents choose to divide the school break evenly such that the children spend the first half of the school break with one parent, and the second half of the school break with the other parent. Parents may then choose to divide Christmas Eve and Christmas Day such that one parent would have custody of the children from Christmas Eve at a particular time until mid-morning on Christmas Day. The parents would then alternate these times on an annual basis.

In addition, parents should consider a custodial schedule that maximizes the children’s time with both parents. Children benefit in different ways from spending time with each of their parents. In situations where both parents are suitable caregivers, mom and dad may want to consider a schedule that allows the children to spend as much time as possible with each parent. Many different options exist for shared custodial arrangements. Some separated families choose to share custody of their children on a weekly basis such that the children live with mom for one week and dad the next week. Other families choose to share custody of their children such that mom has the children every Monday and Tuesday, dad has custody of the children every Wednesday and Thursday, and the parties alternate the weekends such that the children are with mom Friday, Saturday and Sunday in week one and with dad for those days in week two. There is no right or wrong answer here. The key is to pick a custodial arrangement that works for your family.

While the holidays can present unique challenges for separated and divorced families, by maintaining the children’s traditions and implementing a schedule that accommodates both parents, these challenges can be overcome. Overall, flexibility and a willingness to compromise when dealing with issues of child custody go a long way to ensure that the children and both parents enjoy their holiday time with one another.

For more information on Child Custody in North Carolina bookmark this page.