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Edgewood Kentucky Family Law Blog

What to do with a business in a divorce

The first step for Kentucky couples who need to divide their business in a divorce is to have it valuated. Once they know what the company is worth, they can decide whether they want to sell, keep or split the business.

Selling may seem like an easy way to get rid of the business if neither person is interested in continuing to run it, but this can actually introduce some complexities. If the business does not sell right away, it might be necessary to decide how they will run it in the interim and whether they will both stay on. This could also delay the divorce process. Some couples may decide to simply keep the business, but many people who are getting a divorce are unable to work together effectively.

The value of a good real estate agent during divorce

When a Kentucky couple is going through a divorce and they need to discuss selling their home, there are a lot of things they need to consider. One of the trickier issues is determining whether to accept an offer on their home. A major factor in determining this is the relationship that the divorcing couple has with their real estate agent.

The real estate agent needs to be on the same page with the divorcing couple. If the divorcing couple is going to split the assets from the home or use the assets from the home to cover other joint debt, they need the home to sell for as much as it possibly can. If the couple does not trust their real estate agent, each one may spend a lot of time discussing the sale of the home with their attorneys. This is going to get expensive. However, if the couple trusts the real estate agent and listens to their professional advice, both partners should be able to get the best price for their home.

Claiming dependents after divorce

People in Kentucky who claim dependents on tax returns may experience no complications. However, in cases in which the same dependents are claimed by multiple taxpayers, such as divorced or separated parents who both claim their children, the Internal Revenue Service will have to apply certain rules to decide whose claim to allow.

Claiming dependents means that taxpayers may be able to file as the head of the household. It also means that they may be able to claim certain tax credits, like the Earned Income Tax Credit, the Child Tax Credit and the Child and Dependent Care Tax Credit.

Dealing with child support payments after financial changes

For some parents in Kentucky, keeping up with court-mandated child support payments may seem impossible. While the payments are meant to provide children with the funds they need to live a full life, the support order is generally based on a formula tied to the parents' income. However, in some cases, parents' financial situations change dramatically after the original support order is issued. While a formula is used to calculate that initial order, there is no automatic recalculation based on financial changes. Therefore, some parents may be struggling to make ends meet and find themselves facing child support debt.

In these cases, the parents who are not meeting their child support obligations aren't careless or deadbeats; instead, they are simply unable to handle their full payments each month. When child support debt racks up, the penalties can be significant and include loss of driving privileges, fines or even jail time. However, there are options for people facing child support burdens that are too high to bear. Parents can return to family court to request a child support modification based on changes to their circumstances.

Can you claim Social Security benefits on your ex's record?

With more couples here in Kentucky and elsewhere divorcing around or after retirement age, supplementing income becomes a primary concern. Any retirement accounts the couple would have shared had they remained married are more than likely diminished through the property division part of the divorce.

If you find yourself in this position, you may wonder whether you can supplement your income with Social Security benefits based on your former spouse's work record instead of yours because the amount would be higher. The short answer to this question is maybe.

Tips for protecting a business in case of divorce

Some entrepreneurs in Kentucky may want to take steps to protect their business holdings in case of divorce. One way to do this is with a prenuptial or postnuptial agreement.

Neither a prenup or postnup will necessarily allow a business owner to keep the entire company. Instead, it can be a way of making an equitable agreement about the business. One option is to specify that the business is the distinct property of the owner, but the agreement can also specify that the spouse will get a share of the business's value after marriage. The business might also be run as an equal partnership. This could allow one person to buy out the other. If the couple can get along, they might agree to continue running the business even after divorce.

Preparing for the end of a marriage

Most people exchanging vows in Kentucky aren't thinking about how they would plan for a divorce if their marriage should end. However, each year, roughly 2 million Americans untie the knot. This is why it's generally advised that couples considering a split do so with a plan a mind. The first thing that spouses may want to do is determine if they really want to call it quits. Divorce is a life-changing decision that can have a big emotional and financial impact.

There's also the initial research phase. State laws regarding divorce vary as does the amount of a time a couple needs to be separated. It can also be helpful for a spouse to establish their personal and financial goals ahead of time, especially with assets that may be affected by divorce such as retirement accounts. If children are involved, what makes sense with custody arrangements is another important consideration.

Dealing with education savings during a divorce

College tuition can be an unanticipated casualty of divorce for parents in Kentucky who decide to end their marriages. According to studies, almost 40 percent of marriages end in a dissolution, but few couples plan for the financial effects of divorce before it happens. This means that long-established plans to pay for the children's higher education can become a serious challenge, given the financial strains that can accompany a divorce. The costs of university tuition continue to rise approximately 3 percent each year, and the totals can be astronomical. It costs over $46,000 on average for one year at a private four-year school and over $20,000 each year at a state university for tuition, fees, and room and board.

Many parents work to save for their children's education with a 529 account. This special type of savings program is earmarked for educational expenses only. At the same time, parents may not be able to keep up with their planned savings after divorce; it costs more to run to households than one. In addition, it can be important to deal with the 529 account itself as part of the divorce decree. These accounts usually belong to one parent, and the owner or beneficiary can be changed.

Survey finds common factors in divorce

Kentucky couples might benefit from premarital counseling, but even people who have been through this kind of counseling may still end up divorcing. In a survey of people who had participated in a program called PREP 14 years earlier, which focused on improving couples' communication and conflict resolution skills, some reported that the counseling still did not adequately prepare them for marriage or the changes that happen over the course of marriage.

This was one of 11 reasons cited as divorce factors in a study conducted by the National Center for Biotechnology Information. From lack of family support to domestic violence to infidelity, the 52 respondents identified a number of reasons their marriage did not last. In three-quarters of responses, participants said a lack of commitment played a part. Over half said they had communication problems that resulted in too much arguing, and nearly half said they were not old enough when they married.

How child support helps parents

Custodial parents in Kentucky and throughout the country may receive funds from noncustodial parents to help raise their children. It is important that these funds are used solely to take care of a child's expenses. If a payment is more than a parent needs in a given month, it should be kept in reserve to cover other future expenses. There are many different ways a child support payment can be used to help a child.

For example, they can be used to pay educational expenses such as buying books or paying for field trips. They can also be used to pay for activities outside of school such as a camp or playing in a youth sports league. Noncustodial parents may be responsible for helping to pay a portion of a child's health care needs. In some cases, the child could be covered by a noncustodial parent's health insurance plan.

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Dietz & Overmann, PLLC
130 Dudley Road Suite 150
Edgewood, KY 41017

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