California is home to many wealthy couples and while the accumulation of wealth and assets is a benefit to any married couple, it becomes a complex matter if the marriage leads to dissolution. A high net worth divorce goes involves the same process as with regular divorce. What makes this type of divorce different is the fact that assets are at greater risk and this may result in more battles and litigation, which can increase the time spent in the divorce proceedings. What causes anxiety and sleepless nights for couples are clashing ideas about the value of particular assets and the potential economic losses that may come with the divorce. In addition to the need for high-level legal expertise and financial sophistication, high net worth divorce/ high asset divorce also calls for a high level of discretion as the media may put all their efforts to dig up and often falsify sensitive personal information.
If you have substantial property and assets and you are contemplating divorce, working with knowledgeable and sophisticated divorce attorneys is essential in protecting your financial interests. The high asset divorce attorneys at San Diego Family Law Attorney have extensive experience in these types of cases and a strong understanding of the complexities of property division and reimbursement. Serving clients throughout the San Diego area, we are committed to preserving wealth by pursuing smart solutions. We also help clients navigate complex issues of property settlement and spousal support. Call us today at 619-610-7425 or fill our online form to schedule an appointment to explore the options you can pursue and the likely outcomes.
What Makes a High Net Worth Divorce Different from the Average Divorce?
High asset divorcees may own businesses, have a lot of investment, have large retirement funds, be a licensed professional, own a home or more than one home, own other property, have asset store overseas or be involved in international deals, or have entered the marriage with a lot of money. In such cases, one party might feel that they are entitled to more of the property, a large sum or spousal support while the other party disagrees. The complexity of property division lies in the classification of all property as either separate property or community property. In California, community property is shared equally between the parties. It is against the law for either party to hide assets or fail to disclose all the information that they are required to, and this can have huge financial consequences.
Financial Issues Associated with High Net Worth Divorce
There are a number of often unique issues brought about by high net worth divorces. For instance, if both parties run a family business, their separate interests will have to be evaluated. This implies that the assets will need to be examined and the contribution of each spouse will need to be assessed. Other issued which often rise include:
- Reals estate holdings
- Jointly shared assets such as IRAs, stocks options, and pensions
- Non-family partnerships
A high asset divorce involving same-sex couples is particularly sensitive and the partners must be careful with how they choose to pursue their interests. This can be attributed to the fact that it took a significant amount of time before California laws could legalize same-sex marriage. As such, the partners may have accumulated substantial assets and debts before they were officially married. In such cases, it is imperative for both parties to seek professional guidance.
Joint Business Ownership
Having your own business as a couple can be very rewarding. In some cases, the divorcing spouses or partners own a business together while in others, one spouse owns and runs the business on his or her own. Sometimes, a business is shared between one or both spouse and other business owners. Therefore, if you are a business owner, retaining the expertise of an experienced high asset divorce attorney is imperative because your future may depend on it. In some divorce cases, the conflicts involving business ownership may be solved by the parties selling the business and splitting the funds, or by one party buying the other out of business. Irrespective of how you handle the business in the divorce, it is imperative for it to be appropriately valued.
Retaining an experienced attorney means working with an attorney who has a working relationship with financial professionals and experts who can value your business and divide it equitably. Spousal support can be greatly affected by the issue of business ownership. For instance, if one partner buys the other out, one spouse will be jobless while the other will continue to have an income. Or, if one spouse owns the business with other parties, any role that the other spouse played in helping that spouse obtain education, training, or financial aid will be taken into consideration when determining spousal support.
As a licensed professional, whether you are an attorney, a doctor, a dentist, or you have any form of license that allows you to provide services in your profession, working with an attorney is imperative if you are going through a high net worth divorce. Just like divorcees who are business owners, your livelihood could be at stake. Your attorney will be able to help you with issues involving property you own or lease, including buildings, land, and equipment, retirements funds, valuation of your business practice, finances, taxes, and any life insurance policies.
In addition to business and property ownership, investments can be great determinants of how your property will be divided in your divorce. Any investments you have made during your marriage, as well as the income earned, is eligible for equitable distribution in divorce. However, each marriage is unique and couples may have different investments during the marriage and one spouse’s investments does well and the other poorly. It could also be a situation where one spouse simply does not want to cash out all his or her investment. If you have made significant investments, professional evaluations and projected profits may be vital in protecting your interests in marriage dissolution. It may be easier to access experts such as forensic accountants and appraisers who can help you understand and work out the details of your divorce by working with a qualified and experienced lawyer.
Community Property and Separate Property
California recognizes two types of property; separate property and community property. Separate property belongs to one spouse or partner and community property belongs to both spouses or partners and must be divided equitably between them. In high asset divorces, it can be quite a challenge to categorize property as either separate or community. California laws define separate property as anything acquired before the registration of the domestic partnership or the marriage, or after a separation. Anything acquired through inheritance or as a gift before, during, or after the marriage or partnership may be categorized as spate property, and this also includes any financial benefits achieved through the sale or investment in any gifts or inheritances.
Community property, on the other hand, is any property or debt acquired during a registered domestic partnership or marriage. This includes credit card debts, furniture, businesses, stock options, pension benefits, retirement benefits, homes, the income of both parties, etc. Gifts and inheritances are considered to be community property if they were passed down to both spouses. Community property is supposed to be divided equally upon divorce but this presumption can be refuted through written deeds and agreements that state otherwise.
Community property also includes intangible assets that are held jointly and were acquired during the marriage. This, for instance, may include the goodwill of a business, which is the value of a professional practice or business that is in excess of the value of its spousal labor, net proceeds, physical assets, and fair returns. Goodwill can include workforce skill and training, repeat customers, systems and controls, location, and effective advertising. It can be evaluated using an excess earnings approach or a market value approach (what a buyer would pay for the business). These approaches are complicated but the seasoned lawyers at San Diego Family Attorney can help you understand the details and advise you on how these approaches may apply to your circumstances.
Finances may be intertwined depending on how long a couple has been married. The more intertwined they are, the more complex it is to categorize property and debts. It is common for couples to mix separate property and community property, especially in longer marriages. While a method known as tracing can be used to determine the origin of conflicted property, it may not always be useful.
In California, spousal support is granted based on a standard calculation, but this varies form one marriage to another. One of the critical issues that affect spousal support is a couple’s standard of living during the marriage. When calculating child support in high net worth cases, the court may not strictly follow the provided guidelines. Moreover, the court’s evaluation of the lifestyle that the couple enjoyed during the marriage will partly determine the amount of spousal support that must be paid in this type of marriage dissolution. For instance, if the couple lived a luxurious life, a significant amount of spousal support will be paid to the other spouse until he or she is self-sufficient. Just as with average divorce, spousal support in a high asset divorce will depend on several things including:
- The lifestyle that was established during the marriage
- The length of the domestic partnership or marriage
- Each spouse’s ability to pay spousal support
- The health of both parties
- The age of both partners or spouses
- Existing debts
- Children and necessary child care
- Any effort that one spouse put into the home or childcare
- Any effort one spouse put into the education of the other
- Possible tax implications on either spouse paying or receiving spousal support
Family Law Representation in San Diego Area
If you have multiple pieces of real estate, investments accounts, and ownership rights to a business, working with a highly skilled and experienced San Diego divorce lawyer is paramount in protecting your investments. At San Diego Family Law Attorney, we can help you navigate the complex issues involving property division and spousal support. One of the factors that make high net worth divorces complex is the fact that the spouses often share business assets, high-valued assets, multiple properties, accounts, and investments. This is why you need a divorce attorney to prudently consider what assets and property are marital, which ones ought to be separated, and what the value of each property is.
The larger the family holdings, the more the complications there are to deal with and the greater the opportunities to engage in battles. Careful preparation and accounting are crucial elements in avoiding disputes that can lengthen divorce proceedings. All assets must be accounted for, and while this is no simple task, you can trust the extensive experience of our attorneys to come through for you. With years of accumulated knowledge, we will help you achieve your objectives in your high net worth divorce. We handle all complex property division and settlement issued involving:
- Family business
- Shared businesses
- Closely held businesses
- Separate property holdings
- Stock options, 401(k) plans, IRAs, and profit sharing plans
- Real estate holdings and investments
- Tax and debts
- Domestic relations orders
- Settlements involving prenuptial agreements
- Overseas assets
- Investment opportunities that have not yet started bearing fruit
San Diego Family Law Attorney provides sophisticated representation for couples involved in contested matrimonial processes where significant business interests, investments, and assets are involved. Talk with one of our experienced and discreet high net worth divorce attorneys today. We welcome you to contact us at 619-610-7425 for a complimentary consultation. You can rest assured that brighter days are ahead and you can rely on our complete discretion and confidentiality in your high net worth matter.