Sansa, Jon, and an attorney's perspective on partnership

Why did Sansa play her cards so close to her hand-embossed vest? I know why, and I teach my business clients this vital lesson every day. She did exactly the right thing for herself, and for the North.

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Sansa was faced with Jon, who she has strong personal bonds with. He has a lot to offer:

  • Combat and military strategy skills she needs;
  • Substantial military resources and a strong reputation to help raise more troops;
  • Objectives which align very closely with her own, especially in the short term.

She wisely enters into a partnership with him. However, Sansa recognizes that, like all partnerships, this one is imperfect:

  • They were far from friends as children;
  • Jon has advisers Sansa doesn't know or trust;
  • Jon, while awesome, has substantial limitations as a politician and diplomat.

    Sansa chooses to balance these factors by looking out for her own interests, while recognizing that strengthening her partnership is good for everyone. She doesn't tell Jon about her extra forces, and makes sure that she is seen leading the victorious party. She's just improved her military reputation and avoids the pitfalls of one of Jon or one of his advisers making a mess of things by engaging in a protracted siege of Winterfell or otherwise damaging the built-in advantage she had by having a large, secret force she could deploy at will.

    A substantial part of my practice is partnership dissolution. When people, business plans, or the business environment change, once fruitful partnerships fall apart and leave valuable assets in their wake. Sometimes nasty litigation crops up around these dissolutions, sometimes it doesn't. In Westeros, it's swords instead of lawsuits, but the basic principle is the same. Sansa doesn't know if Jon is capable, how long he'll survive, or if she can trust him not to usurp her throne. 

Sansa's moves are calculated, and would not have placed Jon in much danger if he'd stuck to the plan he had disclosed to her (involving a defensive position and trenches) instead of a doomed charge. She's working to maintain her partnership while being careful to maintain her own interests. 

The legal lesson in this is that since partnerships can end, it is critical that each partner consider that possibility while forming and maintaining them. No matter how strong the bonds or how perfectly matched the motivations, a smart partner is careful to maximize their interest, maintain an element of control, and generate a personal brand that can persist beyond the partnership. That's exactly what Sansa did. It doesn't mean she doesn't care about Jon or doesn't want Jon to succeed, it just means she's smart enough to know that stuff happens and it's better to be ready for it than blind and unprepared.

Tax Considerations During Divorce-

Going into a divorce with plenty of information about tax implications can be the difference between a fair resolution and a costly mistake.

There are a wide range of issues to consider:

-          Tax Treatment of IRAs/401(k)s- Retirement assets will eventually be taxed as income; this can make your IRA a much less attractive asset than a home, for example.

-          Dependent Tax Exemption- These critical, valuable assets should be considered carefully.

-          Head of Household Status- The benefits of this tax status mean it’s worth it to negotiate this issue.

-          Capital Gains Considerations- Whether selling a business or property, the tax burden of the profits on that sale are of vital importance.

-          Year of Divorce Tax Filing- Filing jointly or separately is a financial decision with considerable consequences.

-          Tax Deductible Alimony- Making sure your alimony payments are deductible requires expertise and attention to detail.

It’s easy to forget to deal with taxes, particularly ones that are in the distant future. A skilled attorney, coupled with a tax professional who knows how to pay attention to detail, can manage your liability and risk and get you the fairest possible result.

Dealing with Emotional Abuse? There is Hope.

Emotional abuse doesn’t get the respect or attention it deserves. My clients figure that if they aren’t being touched, it is not abuse. That couldn’t be further from the truth. Emotional abuse can be just as impactful as physical abuse, especially to your kids.

The courts do not place the same automatic emphasis in a divorce on emotional harm as on physical harm, but an experienced advocate you can help make sure you are heard.

Hurt feelings abound in almost any divorce, but emotional abuse has a different tone and tenor. Some signs of emotional abuse are:

-          Obsessive monitoring, including spying on e-mails, phones, and your work

-          Prevents or discourages you from seeing friends or family

-          Tries to stop you from going to work

-          Controls your access to money and how you spend it

-          Threatens to harm themselves or the children if you don’t comply with their wishes

-          Exercises control over what you wear, eat, your friends, or what you do

These are just some of the signs that you are in an emotionally abusive relationship. Any kind of toxic verbal aggression, dominance, or jealous behavior could qualify.

This kind of abuse can escalate quickly into physical abuse, so please keep yourself safe. I happily prepare, file, and litigate protective orders for any client who has suffered abuse at no charge. Don’t hesitate to call.

Small Partnerships and Single-Owner Businesses - Worth More than you Think

Marital estates are the sum total of everything you and your spouse have built over the course of your marriage. That includes tricky assets like a partnership interest in your wife’s real estate company or your husband’s successful blog and Etsy shop.

The key with these assets is not just to think of them as sources of income, but to recognize that you and your spouse have created a cash value in the business. Even companies with modest profits can be worth seven figures, if their gross sales are high.

Coming to a fair valuation of a small business involves a number of complex steps, and the guidance of an attorney who can combine experience in buying, selling, and evaluating small businesses and divorce law is essential to getting the best result. These steps include-

-          Careful review of the business’ books

-          Evaluating the business formation documents to ensure a smooth ownership transition

-          Applying a thorough knowledge of various business evaluation methods (asset-, income-, or market-based) to determine the fairest valuation

-          Considering retaining a forensic accountant to evaluate potential wrongdoing or mistakes

-          Negotiating a fair value of the marital estate’s interest in the business

Achieving a fair result through this process is tough, but by hiring a professional with the right expertise, you will give yourself your best chance. The truth is that you can’t afford to let this one go.

Custody Evaluations, a Path Forward

Disputes over custody can generate just as much difficulty as financial disputes, because they have just as much (or more) at stake.

Quality time with your son or daughter is the goal; sometimes it can seem so far away.

Quality time with your son or daughter is the goal; sometimes it can seem so far away.

Let me be clear: Using your children as bargaining chips or withholding time with your children to punish your spouse is bad for your divorce case and very bad for your kids.

If you are on the other side of this kind of behavior, it feels like running into a brick wall. Perspective is the problem: you are trying to help your kids, your ex is trying to ‘win’ an imaginary conflict.

A custody evaluation is often a great way to ground the debate in the best interests of your children, where it belongs.

These evaluations are performed by a licensed professional, usually a child psychologist. They evaluate virtually every aspect of both parents’ home and work lives and make a recommendation as to the best custody situation for your children. They include:

-          Psychological testing on parents

-          Interviews with parents

-          Interviews with children

-          Home visits

-          In-office observation of parents and children

-          Collateral interviews (like teachers and grandparents)

If you’ve determined that a custody evaluation is needed, you need to get a talented and experienced attorney on your team. They will be able to pick the right evaluator for your situation, make sure that the appropriate parent bears the cost of the evaluation, and provide the information needed to help the evaluator see the entire situation.

What do I do about financial infidelity?

Traditional infidelity is as old as marriage itself, and is a common tipping point for a divorce. Financial infidelity is a new kind of deceit. It is on the rise and just as harmful.

82% of spouses have reported lying about their shopping habits, and a majority say money is used to control their relationship[source]. There are a lot of different ways your spouse can be financially unfaithful:

-          Lying about the cost of big ticket items

-          Creating savings accounts and hiding money from you

-          Applying for credit cards and racking up big debts

-          Making risky investments without consulting you

-          Concealing a promotion, inheritance, or other source of income

If you’ve discovered financial infidelity, all is not lost. These transgressions are an opportunity to work on repairing your marriage.

Commit to being honest and open-

Create joint accounts, share passwords, and be honest. You can’t make true progress towards putting infidelity behind you unless you’ve laid the rot bare.

Consider professional help-

Couples counseling and financial planning assistance can both be instrumental in overcoming the challenges financial infidelity can place in front of you.

If divorce is the only option, taking these steps first will allow you to feel good about your decision to part ways and set you up for a quicker and more affordable resolution of your dispute.

If you or someone you know has been the victim of financial infidelity and need recommendations for professionals, guidance on resources, or have questions about filing for divorce, contact me.


Dealing with a windfall:

Congratulations! You may have won the Powerball, sold a business or investment, settled a major lawsuit, or received an inheritance. You have suddenly got your hands on a considerable amount of cash. Even people of means are usually unused to the experience of having six figures in their checking account, and approaching good fortune in the right way can create a long-term positive change for you and your family

Step 1: Engage some professionals

Talk to people who have experience with this. Most professionals will be happy to have a brief chat with you, at no charge, about the basic ramifications of your situation, and explain what you can expect and generally how they advise clients to handle a windfall. For all of these professionals, look for someone with experience handling assets like yours- don’t pick someone you know as a favor to them. Try to avoid being someone's richest or poorest client; take advantage of their experience without being unimportant to them. You should consider hiring:

-          A tax attorney or accountant.

Taxes eat away at large sums in a hurry, and protecting and managing assets reduces that impact.  These folks will also be a great source of referrals for other professionals you may need.

-          An estate planning attorney.

Having significant assets changes how end-of-life and disability planning works. Estate plans can help protect your assets not only for you, but for your heirs.

-          A financial planner.

Earning a third of a percent in a savings account is not the best you can do. Where you store your assets is going depends on your liquidity needs and willingness to accept risk. A financial expert can help steer you down the right path.

Step 2: Be generous, but not foolish

You’ll find that giving away your good fortune feels fantastic, but it’s important to do your due diligence. Don’t write checks to your friends; ask to see the bills they are struggling with and pay them directly. Don’t make investments outside of major markets; particularly in ventures you or your loved ones don’t have experience with. You’ll get much better return using conventional investment vehicles.

Step 3: Don’t change your life too much

Don’t immediately call into work and quit, get married, or make any other big decisions in the days or weeks after your windfall. If it’s the right decision, it will still be the right decision in a month or two, and you’ll be better able to evaluate your options. The financial consequences of an impulsive move can be bigger than your windfall and put you in a bad spot.

Step 4: Buy yourself something nice

The conventional wisdom is that you should spend 1.5% of a windfall on something frivolous. That can be a big vacation, a nice piece of jewelry, or something special for your home. Whatever it is, pick something that will have lasting value to you and won’t incur costs down the road that you can’t afford on your regular income.

Congratulations again! You have a lot to be happy about, and if you are careful and wise, it will help you find happiness for years to come.

I'm getting a divorce- do I need an attorney?

Whether or not you need to hire an attorney to help mitigate the enormous stress of a divorce is a complex personal question, and it depends on what point in your life you find yourself, as well as your ability to handle paperwork, juggle your schedule, and be reasonable and courteous when negotiating with your spouse.

A few simple rules- you need an attorney if:

-          You have minor children. Balancing your rights with the need to put your children first is complicated, and too important to go it alone.

-          You have non-cash assets. Managing the long-term values of different types of assets is challenging, and it’s easy to make mistakes and wind up with an unfair result.

-          You carry significant debt. You have to be vigilant to prevent carrying debt from the actions of your ex. Attacking these issues early can save you a fortune down the road.

-          You or your spouse own all or part of a business. Making sure that your divorce doesn’t disrupt business operations or cause an unintended transfer of interest is a critical component of a fair divorce disposition.

-          There was domestic violence in your marriage. Violence affects every element of a divorce, and usually makes fruitful, fair negotiations difficult or impossible.

In the end, it’s up to you to balance the cost of an attorney with what’s at stake and make the right decision.

For more information about divorce, custody, and your rights, please attend Joseph’s free seminar and question and answer clinic on December 17th at 5:30 PM. It’s at the Wasatch County Senior Center, classroom 159.