Ron & Linda’s Challenges
Ron's career as an insurance agency owner demanded significant evening and weekend commitments. This created challenges for his parenting time and Linda's ability to pursue outside employment.
While Linda wasn't officially employed by the business, she provided essential, but unpaid, back-office support from their home, enabling Ron to focus on growing the agency while ensuring someone was home for the children after school.
She was willing to remain the primary caregiver until Jill graduated high school. However, given Ron’s irregular hours, she was unsure how she’d be able to pursue paid employment.
Ron worried about having quality time with the children, replacing Linda’s valuable skillset and the costs to do so with a paid employee, while dividing their assets in a way that wouldn't harm the agency's operations or Ron's ability to provide ongoing support.
Putting aside preconceived notions
Ron and Linda’s lives were inextricably intertwined, both personally and professionally. Making the matter of ending their marriage extremely complex.
Prior to entering mediation with us, they feared they’d have no choice but to retain attorneys. Resulting in a settlement neither was happy with.
Thankfully, both we, and an attorney Linda met with prior to meeting with us, were able to convince them otherwise.
Being open to creative solutions
Many couples don't realize that unlike rigid court processes, mediation offers the flexibility to develop solutions that truly fit their family’s distinct circumstances.
Using our extensive experience with business owners’ divorces, we were able to create the following customized solutions for the Andersons.
A custom-tailored nesting plan
To accommodate Ron's work schedule and Linda's wish to keep their children in the family home through high school, we developed a modified nesting arrangement.
Our adaptation kept both Linda and the children in the family home full-time, with Ron maintaining a small studio apartment.
Ron and Linda agreed to meet weekly to coordinate Ron’s time with the children based on everyone's availability. When Ron has parenting time, he visits the family home while Linda steps out to visit her sister nearby or spend time with friends.
This solution enables Ron to have quality time with the children without the expense of a larger second home, while maintaining stability for the kids.
A non-traditional structure for support payments
The support negotiations were complicated by two factors: Linda's unpaid work in Ron's business and Ron's self-employed status.
While an initial option I presented suggested formally employing Linda to establish clear income levels, Ron preferred to maintain their informal arrangement, to which Linda was amenable.
To resolve the issues of child support and alimony, we:
- Calculated Ron's income using a five-year lookback of his average salary and business profits.
- Determined the market value of Linda's administrative work and imputed an income of $55,000 annually.
- Set base child support and alimony using Pennsylvania guidelines, treating Linda's income as zero.
- Added compensation for Linda's ongoing business support as "additional child support."
- Adjusted the gross amount for tax implications using specialized software.
Ron agreed that when their youngest child graduate high school, the additional child support converts to alimony until both children complete college.
While Linda agreed to continue her business support role until that time, at which point all support payments end.
A recognition for Linda's invaluable contributions
Although Ron legally owned the LLC outright, Linda's role in the agency's success warranted compensation.
The solution we negotiated resulted in a 65-35 split of the business value (Ron-Linda), with Linda's share being exchanged for Ron's equity in the family home.
This allows Ron to retain full business ownership while Linda receives the home's full value, preserving Ron's ability to generate income for ongoing support payments.
