Divorce in High Asset Cases
According to the latest statistics, nearly 40% of all marriages in which the parties have substantial financial wealth, end in divorce. In the entertainment and sports industry, the number of failed marriages has been at a much higher rate. While there are no specific dollar amounts that are attributed to defining high asset divorce cases, they can generally be defined by not only the amount of all such assets or properties, but the breadth of those assets, that generally have a value in excess of $500,000. High Asset Divorce Cases typically have some of the following features:
- Luxury homes, vacation or second homes
- Significant investment and retirement properties and/or diverse portfolio
- Lifestyle and Standard of Living consistent with a high income
- Business interests or corporate ownership involvement
- Significant charitable donations
- Luxury high end automobiles, boats, airplanes
- Intellectual property concerns
It takes an experienced divorce lFawyer to represent anyone involved in a high asset divorce because of the stakes involved. The factors that are involved in high asset divorce cases are often times not seen in other kinds of divorce cases where the parties do not have substantial economic or financial interests. In the high end divorce case, careful financial planning and developing appropriate legal strategies is always crucial.
High Asset Divorce cases often times involve other areas of the law, such as:
- Tax Law
- Estate and Probate Law
- Corporate Law
- Real Estate Law
Another feature of high asset divorce cases involves a determination of whether one or both of the parties have “hidden assets.” Hidden assets can be defined as anything of value that a party has secreted from the other party, such as unknown stocks, bonds, bank accounts, investments or separate business interests. In many cases, it may be necessary to determine if a party has dissipated or sold off marital property or assets to undermine the division of those assets in a divorce proceeding. By obtaining and reviewing all available financial data, documents and accounts, inclusive of business records, it can be determined if property is being hidden or wasted in anticipation of a divorce. Keep in mind that Florida is a “No Fault” divorce state and it is not necessary to prove that a party has behaved badly, hidden away property or wasted property in order to obtain a divorce decree. Nevertheless, it is very important to obtain financial records and disclosures, consistent with the obligations in every divorce case that such materials be exchanged by the parties on an ongoing and continual basis.
Spousal Support / Alimony in High Asset Cases
The stakes are also higher in high asset divorce cases when determining appropriate alimony or if there are children, what the calculation would be for Child Support. There may be a much greater emphasis in future support in High Asset Divorce Cases. Some factors to consider include the following:
- The Financial Resources of the Spouse seeking Alimony
- The Financial Resources of the Spouse who would pay Alimony
- The Lifestyle (of both parties) During the Marriage
- The Distribution of Marital Property, including whether additional marital property may be awarded to reduce or alleviate the need for Maintenance
- Both parties' employability, employment, training, education, etc.
- Whether one party has a history of higher or lower income
- The Length or Duration of the marriage
- Age and Health of the parties
- Significant Economic or Noneconomic contribution to the marriage
- Other relevant factors
Experts Roles in High Asset Divorce
Probably the greatest distinction involving high asset divorces is the role that experts have. Financial experts who are involved in high asset divorce cases are referred to as, “Forensic Accountants or Forensic Economists.” These experts are charged with the responsibility of analyzing the marital estate properties, debts and liabilities, and business interests. There may include Business and corporate ownership interests, that must be valued. Forensic Accountants will prepare spreadsheets reflecting the value of marital and separate properties and all liabilities, such as mortgages, loans, credit cards, etc. These experts will often times be called upon to perform a “valuation” of business interests or business ownership interests because businesses must be valued to determine their worth when businesses must be divided in a divorce proceeding. An example of this kind of valuation occurred in recent years, when the owners (husband and wife) of the Los Angeles Dodgers were going through a divorce. Ultimately, the parties sold the team and the sale was involved in the distribution of their marital property. Real Estate Appraisers of both residential and business properties are commonly relied upon to establish the value of real property interests. Because of the tremendous tax implications involved in high asset divorce cases, it is always wise to obtain the advice of an extremely well-qualified tax professional.
With so much at stake in high asset divorce cases, it is important to recognize the time and energy it will take, in a coordinated effort with a variety of legal and forensic experts, to define and value all marital properties and liabilities and develop an appropriate legal strategy as to how all marital assets and debts are to be divided. Another factor, that is common in high asset cases, occurs when a Husband or Wife enters a marriage with significant pre-marital or separate property, oftentimes with significant financial interests via an inheritance.