A couple with a high net worth and sophisticated financial holdings must carefully consider the financial implications of a divorce. When large amounts of money are involved, you must take care to separate and value the assets correctly. You need a divorce attorney who understands complex financial matters.
The family law professionals at REIDDENNISFRICK have decades of experience with high net worth divorces. We have the knowledge and skill you need to protect your assets during divorce, no matter how large your estate. In addition, we can call on an extensive network of professional colleagues, including accountants, consultants and investigators to assist with the discovery of assets and their valuation.
Because our legal professionals have many years of experience, we understand that every divorce is different. We will talk with you and discuss whether mediation, alternative dispute resolution (ADR), or negotiation may work best for your situation. When necessary, we will litigate aggressively on your behalf.
The Inventory & Appraisement
Most divorce cases begin with the spouse creating an inventory of all marital assets and debts. While this can be relatively simple for many, it can be quite complex and daunting for high net-worth couples. In Texas, all property possessed by the spouses at the time of their divorce is presumed to be community property. Separate property primarily consists of property owned by one spouse before the marriage, as well as property received during the marriage by gift or by inheritance. We will assist you in the creation of your inventory and will discuss with you whether an asset is community property or separate property.
Tracing Separate Property
High net-worth couples often bring valuable property into the marriage, receive expensive gifts, or inherit substantial assets. Sometimes, separate property is sold and the proceeds are used to buy new property during the marriage. Sometimes, one spouse’s separate property becomes commingled with community property. Commingling occurs when a spouse’s separate funds are mixed together with community funds in the same account. Proving what part of the resulting marital asset is separate property requires a careful process called “tracing.” Our divorce lawyers have the knowledge and experience necessary to address even the most complex tracing issues which arise in divorce proceedings. For more information about tracing separate property, click here.
Valuation of Assets
Property division in a high-asset divorce often involves disputes over the value of assets. An accurate valuation of personal belongings, real property, and financial holdings is an important step in this process. Financial assets may include sophisticated holdings such as stock options, deferred compensation, pensions, 401ks, retirement plans, family partnerships, and trusts. Some assets, including retirement accounts and stock options, may have a lower value because of tax implications or transfer restrictions. We can help you and will work with professional appraisers or financial experts to determine an accurate value of your marital assets.
Many high net-worth couples own their own businesses. These closely-held businesses may be family-owned businesses, professional practices, service companies, franchises, manufacturers, retailers, etc. They may be S corporations, C corporations, limited liability companies (LLCs), general partnerships (GPs), limited partnerships (LPs), professional corporations (PCs) or professional limited liability companies (PLLCs), or another form of business organization. They may have only a single owner, or they may have several owners including one or both spouses. Determining the value of a spouse’s interest with reasonable accuracy almost always requires the assistance of a business valuation professional and an attorney experienced with business valuation issues. For more information about business valuations in divorce cases, click here.
Some spouses dishonestly try to hide assets from each other, especially when considering divorce. Some have already moved on romantically and spent community money on their new romantic interest or given expensive gifts. In high asset divorces, these expenditures and gifts are often quite substantial. Finding hidden assets and determining what expenditures and gifts have been made often involves the use of legal processes of discovery to uncover unknown assets and secret spending. When necessary, we will work with private investigators and forensic accountants to find hidden assets and how community assets have been spent.
High net-worth couples may have additional challenges if they have children. Private schools, expensive extra-curricular activities, and international travel may be important considerations. Parents may routinely travel for business or pleasure, and may have unusual scheduling issues. If you have children, we will help you determine the best parenting plans, custody arrangements, and visitation schedules that work for the entire family.
When calculating child support for a high-income family, it is important to consider the reasonable needs of the children and primary custodial parent, and make sure we are following guideline child support provided by the state of Texas. Such guidelines have a cap, and many high net-worth parents earn far more than such cap. We can help you determine whether your children have legitimate needs which can be proven to the court to justify “above guideline” child support or shared payment of other expenses such as school tuition, extracurricular expenses, travel costs, automobiles, and even college.
Alimony and Spousal Maintenance
Often, there is only one true breadwinner in the family. One spouse may require periodic future payments for a time in order to complete school, gain job skills, or reenter the workforce. Such payments may take the form of contractual alimony or court-ordered spousal maintenance. We can also assist you whether you are seeking such payments for yourself or opposing such a request from a spouse who is perfectly capable of earning enough for their own support.
High net-worth couples often have enforceable premarital agreements before they marry, as well as post-marriage partition and exchange agreements. Such agreements often address the issues that arise in divorce proceedings. In the absence of fraud, coercion, or other factors, such agreements overwhelmingly are enforced by Texas courts. On the other hand, parties sometimes overlook or ignore provisions of their agreement with devastating consequences. We can help you determine if there are grounds to challenge such an agreement and, if not, how the provisions of your agreement may affect your divorce based on your particular facts and circumstances.
Things to Keep in Mind
We will advise you on the best way to handle the division of retirement plans, IRAs, pension plans, mortgages, businesses, stocks and other assets. To avoid tax penalties for early disbursement of funds, you can request that the court issue a Qualified Domestic Relations Order (QDRO) so that the funds can be disbursed when the working party retires. It might be more beneficial for each spouse to keep their own retirement account and for the other party to take another asset, instead of dividing the retirement account. There are many options we can discuss to see which would benefit you the most.
Having an accurate and detailed inventory and appraisement of the marital assets can help move parties to a settlement, and is invaluable for use at trial. If the parties are unable to reach a settlement without assistance, keep in mind that almost every divorce case in Texas is required to participate in mediation before going to trial. For more information about mediation in divorce cases, click here. Rest assured that if the parties are not able to reach an agreement with or without mediation, our attorneys are prepared to go to trial and fight for you.
We understand that you want to protect the assets you have worked hard to acquire. In addition to assisting you with the financial aspects of divorce, we look for ways to make the divorce process cost-effective. To meet with our high asset divorce team, call John M. Frick directly at (214) 618-1604, or use the form below.
“It’s not how much money you make. It’s how much money you keep.”
̶ Robery Kiyosaki, Rich Dad, Poor Dad