At Hendershot, Cannon & Hisey, P.C. , we understand how to bring clients through some of the toughest issues they can face in a divorce-dividing assets and liabilities. If you and your spouse cannot agree on certain issues, such as how to divide assets and liabilities, your divorce will become more difficult and complex very quickly.
Simply put, a complex case is one in which the value of assets and liabilities are contested. Many of our clients are in fact not millionaires, but families who have a home with a mortgage, two cars with both names on the titles, a relatively modest retirement account, and some credit card debt. Dividing these common types of assets and liabilities can get complicated very quickly without proper advice and representation. If you are ready to discuss your case, call (713) 909-7323 or request a confidential consultation with our online form.
Consider the following story:
One spouse (let's call her Lisa) comes into the marriage with a savings or investment account worth $50,000. The initial $50,000 is the separate property of the spouse that same into the marriage with the assets. However, during those years prior to divorce, both Lisa and her husband Peter made contributions out of their respective paychecks. Those contributions are not separate property. They are community property. So is the earned interest. On the surface, it seems relatively simple to calculate: tally up each spouse's respective contributions.
Here's where it can get complicated: Suppose the account dropped to $30,000 after Lisa and Peter used her savings as down payment on a house. The calculation now requires a thorough understanding of the methods used in tracing the money with accuracy, as well as the ability to translate the calculation into a persuasive argument and evidence that establishes your separate property claim by clear and convincing evidence.
The division of professional practices in the divorce context is uniquely complex. This involves "goodwill," which is a complex factor affecting the valuation of professional practices. There are two types of goodwill: personal and commercial. In divorce court, personal goodwill is not divisible, whereas commercial goodwill is divisible.
Take medical practices-many of which we have represented over the years. Medical practices negotiate a call coverage agreement, in which the medical practice agrees to provide ER coverage at certain hospitals on certain days for X dollars per day. A surgeon may negotiate to be on call for $1,000 per day for X number of days on a 1-year contract. This is an example of commercial goodwill derived from the value of the contract.
The same doctor in the example above may also get referrals from other local doctors based on her reputation. These referrals may generate revenue to the medical practice, but a divorce court cannot divide personal goodwill because it is intangible-her personal goodwill derives from her standing in the medical community.
In nearly every case, our clients generally discuss most with us how to determine community property (which is dividable) and separate property (which is not). This property must be valued properly and then divided. Our clients also express their desire of keeping the professional practice in operation post-divorce. At our firm, we advise clients with the explicit goal of helping them make good business decisions when going through the divorce process. This is often critical to a successful outcome, both personally and professionally. That's what we mean when we tell clients that we care about their whole well-being, not just the results of their divorce.
Many clients are involved in closely held corporations, in which there are multiple partners with ownership interest. This business represents the family's source of income. There may also be inherent value built over time. The central question in these cases is how we divide the closely held corporation in the context of divorce.
Does your company manufacture products or own physical assets? Or perform a service in which clients come to you based largely on reputation? For example: If you have a construction company, you will value equipment (bulldozers, etc.) and customer contracts. In a service company, you will value intangible "personal goodwill" and "commercial goodwill," which can make the situation more complicated (as discussed above).
In other words, we are examining these questions:
Representing people with ownership interests in closely held corporations is a key component of our practice.
Creativity is central in cases involving husband and wife businesses. Our Houston divorce attorneys pride ourselves on our ability to create unique arrangements that allow the business to continue, whether by being co-owned and operated by both parties, or by structuring a buyout to allow one party to continue to operate it. If neither of those options are available, we will bring forward alternative answers to resolve the dispute. Our experience and our resources allow us to craft innovative and effective solutions.
For example: One of our cases involved a body shop run by a married couple. The husband did the hands-on repair work while the wife did the back office bookkeeping. We helped them continue to operate the business together after the divorce. We negotiated employment contracts so they knew exactly what each party would do in the business, with parameters on how to separate their personal lives from their business lives.
Even in cases in which divorcing couples can no longer work together, we can help structure a deal where one party buys the other out over time, so that both parties will continue to have a source of income. This is just one example of a creative solution we have put in place for our clients.
We help our clients separately value each of the three "estates" of land ownership in Texas: (1) what is above the surface; (2) what is on the surface itself; and (3) the oil, gas, and minerals under the surface.
Here is another example: We represented two brothers in the Valley. They co-owned a large ranch in South Texas. We saved each brother more than $1 millionbecause we knew how to value the property, which involved asking the right questions and structuring the best deal possible based on the answers.
In general, here are the four types of clients (when it comes to land, farms, and ranches) that the family law attorneys at Hendershot, Cannon & Hisey, P.C. have experience representing.
Each of these scenarios presents its own set of challenges and circumstances, all of which we can handle.
Relatively few families own unique assets, such as intellectual property, virtual property, or the use of private jets, so properly valuing and dividing these assets is not a task many law firms are experienced in doing. However, at Hendershot, Cannon & Hisey, P.C. , many of our clients do own these types of unique assets, and we have made a career out of obtaining results for our clients in these types of cases.
Unique assets such as these are usually difficult to value and divide, but we have proven methods of doing so based on what we have learned since opening our doors in 1987. Note that there are multiple methods of "dividing" unique assets, such as a motorcycle collection, that may not require you to give up your motorcycles.
The Qualified Domestic Relations Order (QDRO) is the primary tool we use to partition retirement benefits.
These are the benefits of QDROs:
Partitioning retirement benefits is a complex process. Why? One, strict rules and regulations apply. Two, the specific requirements differ tremendously from one corporation to another. Teachers' benefits have their own rules. Military benefits have their own rules. State and federal plans have their own rules. In general, retirement plans (401(k), 403(b), pensions, defined benefit plans, etc.) each function differently and are valued and divided differently-a full knowledge as to how this is done is a must in ensuring the right and fair result.
What happens to your stock options if you get divorced? How can you protect them? At Hendershot, Cannon & Hisey, P.C. , we know that protecting your stock options is your top concern, and we know what steps to take to fight for and achieve the appropriate division.
How do we do this? We start by asking the right questions:
There are two forces in play here. One, the extant rules and regulations, which are externally imposed by lawmakers and governmental agencies. Two, the contractual obligations and company policy requirements, which are internally imposed. We must deal with both of these forces in order to make a proper valuation and division.
We help our clients assess the situation by considering all the relevant factors, which include:
The result depends on the answers to these questions. More importantly, it depends on how you respond. The divorce and family law attorneys at our firm will help you respond in a way that protects what you've earned.
It is relatively "easy" to resolve a divorce case in which the spouses agree on most major issues. In those cases, the lawyer must do very little in terms of valuing the assets and liabilities, as well as characterizing separate property and community property. Complex divorce cases are much different.
This is because of the unique challenges that are part of dividing assets and liabilities, which quickly transforms cases into situations that will not be easily resolved without assistance. That is why at Hendershot, Cannon & Hisey, P.C., our goal is to provide real value for families in exactly this kind of situation. Our law firm is equal parts business law and family law, a combination that truly serves the interests of our clients in Houston and throughout Texas, both middle-class families and those families with significant assets.
Call (713) 909-7323 or contact us online to arrange a consultation.