Divorce | Divorce 101: The Basics | Physical Seperation: What to Know | Legal Separation | Annulment | Dissolution | Collaborative Family Law | Mediation | Spousal Support | A Business as Marital Property | Child Custody and Parenting
Legal Processes Relating to Marriage
A divorce is a lawsuit. The party seeking the lawsuit (plaintiff) files a complaint for divorce with the clerk of courts and the other party (defendant) is formally served with the complaint. The complaint requests the court, among other things, to order the marriage to the defendant be terminated. A divorce is sometimes necessary as it allows the plaintiff and the defendant to obtain court orders to compel or restrain certain actions.
When one party brings an action for divorce, the court will address the division of marital property (including the restoration of separate property), spousal support, child support, and the allocation of parental rights and responsibilities. In the event the parties do not resolve these issues, evidence will be submitted to the judge or magistrate and they will issue a decision regarding the issues presented. Once the issues have been decided, the marriage will be terminated and the divorce will be final.
I have put together some important facts regarding the divorce process to help you better understand the basics of terminating your marriage by way of divorce.
- Filing a Complaint for Divorce: The first step in a divorce is the filing of a complaint for divorce. This document is written by one spouse and served to the other in order to alert them that their partner would like to pursue a divorce.
- Temporary Orders: After a complaint has been filed and answered, the divorce process will officially begin. Temporary orders are sometimes put in place to ensure that bills and other financial obligations are taken care of while the spouses sort out their future arrangements. These Temporary Orders can relate to parenting, child support, spousal support, and payment of bills, just to name a few.
- Discovery Process: The discovery process is a period of time set aside for both parties to get the information they need about income, parenting, assets, debts, and other factors that may be important during the divorce.
- Divorce Settlement is Attempted: Some couples may be able to find an agreeable arrangement without a formal trial and if this is the case, settlement may be an option. This can be accomplished through mediation, settlement conferences with the parties and their attorneys, or the couple’s own arrangement. Achieving a resolution in this manner often saves time and money for the spouses.
- Trial is Completed: If no agreement can be reached, the couple will be required to go to court. This process can take many weeks to complete and may require the use of witnesses, attorneys, and judges. Once both sides have presented their cases, a finalized decree of divorce will be issued to the couple and their marriage will be terminated.
To find out more about the divorce process in Ohio/NKY and your rights and obligations, contact Zachary D. Smith, LLC today. We can guide you through this complicated and challenging time.
Although each divorce is different and legal advice must be tailored to the individual’s circumstances, certain steps are useful for anyone facing divorce.
One point is for certain: do not move out unless it is necessary. Terminating a marriage causes trauma that reverberates through the lives of each family member. One spouse moving out is often the most jarring part of the process. Living together as a nuclear family – husband, wife, and children – is a financially efficient arrangement. Pooling of resources and division of responsibilities is beneficial to the pocketbook and peace of mind. Maintaining this arrangement, and the efficiencies it creates, is why parties should reside together until they have a better handle on what the future holds.
If remaining in the marital residence creates a dangerous environment or if tensions are simply too high, than one party must move out. The following will allow the spouse who moves out (relocating spouse) to understand some of the tasks he or she must accomplish and considerations he or she must make before moving out.
Every person involved in a divorce should consult an advisor before they relocate to their own residence. Consult a lawyer who can help make the best decisions possible. A lawyer can assist in creating a strategy and determining expectations.
In addition to an attorney, it may be necessary to consult a mental health provider to help with emotional issues. In some instances, it may also be appropriate to hire a private investigator, or an accountant.
Identify Sources of Income
The relocating party will need to assess the total income for each party. If both are salaried employees, assessing income is fairly straightforward. Assessing income can be especially challenging when one party is self-employed, owns a business or has investment income. Income from sources other than employment such as investment accounts, trust funds, rental property, pension/annuity/disability payments, and royalties should also be assessed.
It is imperative to ascertain each spouse’s income for several aspects of a divorce, especially child support and spousal support. Because it is easier to obtain accurate records while residing together, this should be done well in advance of moving out.
Prior to moving out, all documentation relating to both spouses income should be gathered. For salaried employees, this means photocopying pay stubs, tax returns, and bonus statements. For the self-employed spouse, bank account information, and loan applications are often most helpful.
Itemize Property and Debt
Before moving out, itemize all assets on a spreadsheet that includes details about the value of the asset including its purchase price and any specific details about the asset (year, make, model, etc.). You should also gather recent statements for all investment, retirement, and bank accounts.
Be certain to check the contents of any self-storage facilities or safety deposit boxes and include them in the itemization. Finally, if possible, take pictures of all the significant physical assets: china, art, jewelry, vehicles, etc. Pictures will preserve both the existence and condition of the property at the time of separation.
In addition to the assets, also itemize debts on the spreadsheet. This itemization should detail the amount of principal owed, interest rate, name and address of the creditor and account numbers.
To find out more about the preparing for physical separation from your spouse in Ohio/NKY, and your rights and obligations, contact Zachary D. Smith, LLC today. We can guide you through this complicated and challenging time.
A legal separation is a formal legal process, not merely physical separation. Like a divorce, a legal separation is a lawsuit. The plaintiff files a complaint for legal separation from the defendant and also asks the court to address the division of marital property (including the restoration of separate property), spousal support, child support, and the allocation of parental rights and responsibilities.
A legal separation and divorce provide the same relief–division of property and allocation of parental rights and responsibilities. However after a legal separation has been completed and a decree of legal separation issues, the parties remain married. During the proceedings, a legal separation can become a divorce at the request of either party providing certain requirements are met (residency and grounds for divorce).
There may be some benefits to securing a legal separation rather than a divorce. The benefits may include maintenance of health insurance and certain social security benefits. It may also be financially impossible for parties to divorce.
To find out more about a Legal Separation in Ohio/NKY and your rights and obligations, contact Zachary D. Smith, LLC today. We can guide you through this complicated and challenging time.
A decree of annulment is an order issued by a court declaring that a marriage is invalid or otherwise defective because certain circumstances existed at the time the marriage was formed. The term annulment can also describe a judicial process in a church. This information relates to an action that seeks a court order annulling a marriage.
Certain marriages are void based upon strong public sentiment against those types of marriages. These void marriages occur when one of the parties: (1) was underage at the time the marriage occurred, (2) was married at the time the second marriage occurred, (3) was mentally incompetent, (4) fraudulently induced the other into marrying, (5) forces the other to marry. A marriage can also be void if it was never consummated.
If your marriage falls into one of the above categories, a court may order your marriage annulled. To find out more about the annulment process in Ohio/NKY and your rights and obligations, contact Zachary D. Smith, LLC today. We can guide you through this complicated and challenging time.
A Dissolution of marriage is a termination of marriage by way of agreement. All matters are agreed upon, reduced to writing, and signed by all parties prior to the court being involved. A Dissolution requires the parties work with their respective attorneys to resolve all issues in the marriage (property, custody, support, etc.).
Once an agreement is reached, the parties will enter into a “separation agreement” that sets out an agreement on the division of property and debts and whether support will be exchanged. If there are children, there will also need to be an agreement regarding the care, custody, and support of those children. In a dissolution, just as in every divorce, the help of actuaries, appraisers, and other professionals to aid in valuing assets may be required.
Once the agreements have been executed, they are then filed with the court and the matter will be set for a final hearing. At the final hearing, the Judge reviews the agreement(s) – the terms and conditions of the property settlement and the provisions regarding the care, custody and control of the minor children. Judges generally approve a settlement unless the terms of the agreement appear completely unfair to one party.
A dissolution differs from a divorce in several aspects. Since the parties agree on all issues, the court assumes they are familiar with each other’s property and financial holdings. Therefore, each party does not need to undergo a discovery or investigation process unless they voluntarily do so.
Second, since no actions are pending before the court, there are no temporary orders regarding child support, debt payment or other issues.
Third, both parties are not always represented by an attorney. While each party has the option to retain counsel, they can choose to proceed with just one attorney who will draft the required documentation and file it with the court. This attorney cannot legally represent both parties, so one party will have to file a waiver of representation along with all other required documents.
Dissolution is not a viable option if there is disagreement as to any issue that cannot be resolved. However, if all issues can be agreed upon prior to entering the court system, a dissolution will provide for a quick and orderly resolution of all matters without the need for numerous court appearances.
To find out more about the Dissolution process in Ohio/NKY and your rights and obligations, contact Zachary D. Smith, LLC today. We can guide you through this complicated and challenging time.
Collaborative Family Law is a mechanism of dispute resolution based on the belief that lawyers who could not go to court would be challenged to problem solve in manner that would ultimately benefit all parties involved. The Collaborative Process is defined by the client centered outcomes that result from a creative client-centered approach.
A Collaborative case commences when all parties involved execute a Collaborative Participation Agreement. The Participation Agreement sets forth the expectations and obligations of the Collaborative process. The Participation Agreement requires those bound to adhere to the tenants of Collaborative Practice: cooperation, honesty, integrity, and professionalism while agreeing they will not seek Court intervention. If the parties cannot resolve their disputes in the Collaborative Process, or if one of the parties determines court intervention is necessary, both parties must retain new counsel. With limited exception such as an emergency, there is a 30-day waiting period before a client can go to court.
Cincinnati Academy of Collaborative Professionals Participation Agreement:
A Collaborative case requires disclosure of all material information. There must be full disclosure without regard to whether the information has been requested. The Participation Agreement places an affirmative duty on all parties involved to disclose all material information. Should a party fail to disclose material information, the Collaborative process will be terminated.
The Participation Agreement also includes a provision that the parties may involve other parties with specialized knowledge in the Collaborative Process. These parties can be experts (appraisers, certified business valuators, etc.) or other professionals such as child specialists, family relations specialists, or financial specialists. Each of these parties can add to the information available to the parties to help them reach a creative client-centered outcome.
Zachary D. Smith is a member of the International Association of Collaborative Professionals and Cincinnati Academy of Collaborative Professionals. To find out more about the Collaborative Divorce process in Ohio/NKY and your rights and obligations, contact Zachary D. Smith, LLC today. We can guide you through this complicated and challenging time.
- International Association of Collaborative Professionals: https://www.collaborativepractice.com/
- Cincinnati Academy of Collaborative Professionals: http://www.collaborativelaw.com/
- The Academy of NKY Collaborative Professionals: http://www.nkydivorce.com/
Mediation is a process in which a neutral third party (mediator) facilitates communication and negotiation between parties to assist them in reaching a voluntary resolution of their dispute. In many cases mediation can be a powerful tool for resolving the issues facing the parties.
Mediators are prohibited from sharing mediation communication with a court unless the parties waive the protection or the mediator learns certain forms of abuse are occurring. Mediation communication are those statements that occur in retaining a mediator or in the mediation process.
There are many advantages to resolving disputes through mediation. Parties are likely to be more satisfied with an agreement they participated in creating, mediation can reduce conflict between parties and can assist them with problem solving going forward, mediation is generally less expensive than litigation, and the resolution can be private.
After the parties agree (or are ordered) to attend mediation and select a mediator, the mediation process moves in stages:
- Fact Finding and Identifying Issues
- Brainstorming Options
- Negotiating Options
- Preparing Terms of Agreement
- Revision of Agreement by Attorneys and Submission to Court
The mediation process can be very satisfying to the litigants and their attorneys. All parties have input over the particulars of the agreement and they can create terms that are specifically tailored to the issues facing the parties.
Attorney Zachary D. Smith has received extensive mediation training specifically in the area of mediating Family Law matters. To find out more about the mediation process in Ohio/NKY and your rights and obligations, contact Zachary D. Smith, LLC today. We can guide you through this complicated and challenging time.
Spousal support is the term used for payments or transfers of money or assets from one spouse to another during the pendency of and after a divorce is final. You may be more familiar with the word "alimony," (as used in the Internal Revenue Code) or the term "maintenance", (as used in the Kentucky Revised Code) which are the same as "spousal support" (as used in the Ohio Revised Code).
A court may order alimony be paid from one spouse to the other on a temporary basis, which will terminate upon issuance of the decree of divorce, and at the conclusion of the divorce which is typically ordered for a set duration, or both. The factors that most drive the court’s determination of spousal support are the length of the marriage and the difference between the incomes of the spouses. Other factors a court will consider include:
- The relative earning abilities of the parties;
- The ages and the physical, mental, and emotional conditions of the parties;
- The retirement benefits of the parties;
- The extent to which it would be inappropriate for a party because he will be custodian of a minor child of the marriage, to seek employment outside the home;
- The standard of living of the parties established during the marriage;
- The relative extent of education of the parties;
- The lost income production capacity of either party that resulted from that party’s marital responsibilities; and
- Any other factor the court finds relevant.
Temporary Spousal Support
Temporary spousal support is that spousal support awarded during the pendency of a divorce (support pendente lite). Temporary support is not a division of property. Rather it is a way for the court to try to maintain the status quo while the parties are in transition. Whether temporary spousal support should be ordered is within the sound discretion of the court after consideration of the facts and circumstances present in the case. An order of temporary spousal support is typically accompanied by an order requiring each party to pay certain marital expenses (mortgage, insurance, private school tuition, etc.).
Permanent Spousal Support
A “permanent” spousal support award does not mean indefinite. Rather, a permanent spousal support award is one that is issued in a final decree of divorce or dissolution. A court can order reasonable and appropriate spousal support after it divides the marital property. As stated above, the court typically relies on the duration of marriage and the difference between the income of the parties when arriving at the amount and duration of a spousal support award.
The events that will require the modification and termination of spousal support are typically set forth in the decree of divorce. Spousal support must terminate upon death of either party. However, it is common for the court to order or the parties to agree that spousal support terminate upon the recipients cohabitation with an unrelated adult of the opposite sex or the recipients remarriage. In Kentucky, spousal support terminates upon the death of either party or the remarriage of the party receiving spousal support.
A typical order of spousal support is a set amount for a specified period (amount and duration) though the term of spousal support can be indefinite. The order of spousal support may also include terms of modification. The order can provide for a general reservation of jurisdiction to modify spousal support upon a showing of a change in circumstances or the circumstances warranting a modification can be specifically set out in the order.
The takeaway is that spousal support is complex. If your divorce involves spousal support it is important that you consult an attorney to help you avoid potential pitfalls. To find out more about spousal support in Ohio/NKY and your rights and obligations, contact attorney Zachary D. Smith. He can guide you through what can be the most challenging part of a divorce.
The valuation of a closely held company can be extremely complex. Likely an expert will be required to evaluate the financial documents, operating agreements, and other important information to offer evidence of its value. The exact process depends on the type of business. Different types of businesses use specific valuation techniques.
In situations where the valuation of a business is the most substantial marital asset, great care must be taken when valuing that business in a divorce. Opposing business valuation experts may value the same closely held business quite differently. Your family law attorney must have a depth of understanding with regards to valuation methods, accounting, and finance. All methods used to value a business contain many subjective value judgments which influence the valuation. There are several common valuation methods:
An asset based approach to valuing a business may be the simplest way to arrive at a value. An asset based approach puts a price on a business by tallying up the value of the assets owned by the business. Start with the tangible assets, furniture, equipment, and inventory. Then look at the intangible assets, patents, trademarks, franchise agreements, business process software, favorable lease agreements, and employees.
Income Valuation Approach
The income approach to business valuation arrives at a value for the business by measuring the owners’ economic benefit (i.e. income). The economic benefit is capitalized, discounted, or multiplied in the performance of the valuation.
The economic benefit (income, discretionary cash flow, net cash flow) is capitalized, discounted, or multiplied to calculate the value. Determining the proper capitalization rate, discount rate, and valuation multipliers is the key to a precise business valuation. This approach is further complicated by the impact payment of spousal support – which can be based upon the economic benefit of the business – resulting in “double-dipping” of incomes.
When the value of a business is best determined by the stream of economic benefits, using a discount rate may be appropriate. Applying a discount rate to the stream of future economic benefits provides a present value of future benefits. The objective of applying a discount rate to the stream of future economic benefits is to determine what the stream of economic benefit is worth in present day dollars after consideration of the risks associated with owning and operating a business. Business valuation professionals will often review sales of comparable businesses to determine the appropriate discount rate.
A capitalization rate represents the risk associated with investing in the business. A business with long term relationships and contracts with a steady earnings history may be a stable business and a safe investment. This type of business would be perceived to have less risk and would have a higher capitalization rate for the purposes of valuation. A new business that is thriving with a limited number of clients would be susceptible to fluctuating revenues and could be a risky investment. This type of business would have a lower capitalization rate for the purposes of valuation.
Once a capitalization rate is established, a formula can be used to generate a value based on the Capitalization of Earnings Approach. The economic benefit of the business is divided by the capitalization rate to achieve the capitalization of earnings.
Sales of Comparable Businesses
Obtaining the value of a business by evaluating the sales of comparable businesses is also referred to as the market approach. The market approach examines historical sales data for similar businesses to value the subject business. The market approach relies upon pricing multiples. Examining sales of businesses which closely resemble the subject business reveal pricing multiples which determine a relationship between the business economic performance and its potential selling price. The pricing multiples for the industry of the subject business are applied to the particular circumstances of the subject business to calculate its value.
To find out more about business valuation and the division thereof in Ohio/NKY and your rights and obligations, contact Zachary D. Smith, LLC today. We can guide you through this complicated and challenging time.
Parental rights and responsibilities must be addressed in any divorce or dissolution proceeding for any children born issue of the marriage.
When a court is required to make a custody determination, there are two possible outcomes: (1) legal custody to one parent, or (2) shared parenting (sometimes called joint custody, where both parents are the legal custodians without regard of who the child is with).
Two aspects to parenting are decision making and parenting time. A party who retains legal custody of the child(ren) has the right to make all decisions regarding the child(ren)’s health and welfare. This includes deciding which school the child(ren) attend as well as what medical procedures are performed and by whom.
Whether one parent is the legal custodian or whether both parties make decisions through a shared parenting plan, both parents will be allocated parenting time. Who gets what parenting time depends on many factors including, but not limited to: (1) work schedules, (2) distance between the parent’s homes, (3) the ages of the child(ren), and (4) the needs of the children. Parenting time arrangements run the gamut and can be as complicated or simple as the parties wish them to be.
A shared parenting plan provides a blueprint for how issues and disagreements involving the children are to be handled. The more thorough a plan is the better as it will help to avoid future confusion and turmoil.
A court will not order a parenting arrangement without first determining whether the arrangement is in the best interest(s) of the child(ren). To make this determination the court will consider factors such as the parents’ wishes, each parent’s relationship with the minor children, and past conduct. It will also look at the wishes of all parties involved including the child, the child’s adjustment to school and home, and, perhaps most important, which parent is more likely to promote a positive relationship with the other parent.
If an agreement cannot be reached, the court may also order an evaluation. The evaluator will prepare a document for the Judge to review giving the evaluator’s opinions on what the best custody and visitation arrangement is for the family as a whole.
Even after an agreement is reached, the court retains jurisdiction to modify the order in the future. In order to modify a custody, one party must show that there has been a change in the circumstances from the time the order was established and that a change in the order is in the best interest of the child(ren). To modify a shared parenting plan, one party must show that a modification of that plan would be in the best interest of the minor child(ren).
To find out more about shared parenting in Ohio/NKY and your rights and obligations, contact Zachary D. Smith, LLC today. We can guide you through this complicated and challenging time.
Courts use a formula to determine child support. This formula computes “guideline” child support. However, the court determines the amount of support one pays to the other and whether it is in line with those guidelines on a case by case basis.
When determining child support, a court will look at such factors as:
- The income of each spouse (including spousal support exchanged)
- The amount of time spent with the child(ren)
- Any payments for work related child care
- Any contribution toward the health insurance expenses for the child(ren)
- Any other payments made on behalf of the minor child(ren)
The Court retains jurisdiction over child support until the child is 18 and is no longer in high school, is 18 and has graduated from high school, or is 19 and still in high school, whichever comes first. Support may continue beyond either of these events under special circumstances such as disability or agreement.
Depending upon the age of the child when the order is set, there may be a change in circumstances throughout the years the support is to be paid. The parties may request a modification of the order if this occurs. If a modification is requested, the parties will have to appear in court and present testimony and evidence as to why the order needs to be revisited.
To find out more about modification of child support in Ohio/NKY and your rights and obligations, contact Zachary D. Smith, LLC today. We can guide you through this complicated and challenging time.