High Net Worth Divorce
High Net Worth Divorce

12/18/2017

Family Law Representation for the Bay Area

A divorce is complicated enough. It can be even more complicated when the couple has significant assets to divide. One or both of the spouses may be aware and concerned with how to divide the assets and whether they can be divided. Often spouses have different ideas about the value of assets, especially assets that are intangible like goodwill, stock options, intellectual property, or closely or privately held businesses. An experienced attorney can help you determined the best method of valuation for assets and whether you need to hire an account who specializes in divorces.

High Asset Divisions, why do you have to be so Complicated?

The sunshine state is home to some of the highest property values and incomes in the Country. Naturally, many couples have accumulated high net worth estates. When those couples separate, experts are needed to determine the value of businesses, investments, high value personal property (those Rolex watches and Porsches), and stocks. Additionally, and very important is determining the couple’s standard of living during marriage, which is necessary when setting spousal support.

California is a community property state. That means that all of the assets acquired during marriage are presumed to be community property and will be divided equally. The same is true for debts acquired during marriage. This presumption can be rebutted, but the party making the claim must produce the evidence to prove that the property is separate. For example, some employees offer incentives as part of their compensation that will be paid in the future. This means that those assets, which are considered community since they were earned during marriage, cannot be divided until the later. But it must be included in the division of property in a settlement or in a trial. These are easy assets to omit if the spouse does not know their rights. Even accumulated vacation pay needs to be divided.

In my practice, we have divided many closely held businesses. These are more complicated to value due to a closed market or no closely related businesses that have been sold. The businesses can include hard assets, intellectual property, goodwill, spousal labor, and return on investments. I work closely with accountants and clients to determine the best value for their assets.

Once a business value has been determined, the spouse running the business can buy-out the other spouse in order to retain the business. This can be complicated as well as there may not be enough funds to pay the buy-out. If spousal support is an issue, it is not always in the spouse’s best interest to deplete the business and undermine the income earners ability to earn income and pay spousal support.

Businesses, Spousal Support, and Child Support are All Intertwined.

In high net worth cases, child support can also become an issue. While the Court generally will only issue guideline child support, in high asset cases, the Court can deviate down from guideline when it is reasonable to do so. Spousal support and child support can greatly elevate the lifestyle of the supported spouse. These issues can be complicated. When the marital lifestyle was luxurious, the other spouse may require significant spousal support until he or she is self-sufficient, or even longer, even forever. In order to reduce the time frame for spousal support, the supporting spouse must insist on the other spouse working towards becoming self-supporting as soon as possible. It can be more complicated if young children are involved.

There are many complicated issues associated with high asset dissolutions. From the division of property, spousal support, child support, and tax implications, these issues are all intertwined. You need a strong and knowledgeable attorney to guide you through the divorce.

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