What You Need To Know About Your High Asset Divorce
While every divorce is as unique as the couple going through it. each divorce case deals with the same issues. Are there children? Then you’ll need to decide what the parenting schedule will be. Where will your child live? Do you have pensions and other retirement accounts? Then you’ll need to divide those up between the two of you. But what about a high earner or high asset divorce?
Common Issues in High Asset Divorce
There are a number of questions that arise in a high asset divorce. Is there a family business or a spouse who has a high income with multiple employment benefits that you don’t understand when you look at the paperwork? How do you handle the various employee benefits, including stock options, deferred compensation, and business valuations?
Your divorce attorney should know how to deal with these complex assets and know-how they should be divided. If your case needs a business valuation, your attorney won’t be doing the actual valuation, but the attorney will have worked with someone who specializes in them. Your attorney is going to know, and be able to orchestrate, how the evidence will come and how to prove the businesses’ worth.
Using a Forensic Accountant in High Asset Divorce
You might need a forensic accountant. Again, your lawyer won’t be putting the numbers together or discovering where certain accounts are, but your lawyer’s understanding of the process is imperative. You and your lawyer will likely have a feeling that there are hidden assets based on the information received from your spouse in the discovery process. Proving there are hidden assets and putting the information before the Court properly is important.
Proving your case is also an important factor. Many people know that their spouse is skimming money from the family business or using creative accounting, but you’ll likely need an expert to prove your case. A high asset divorce lawyer should be familiar with the process.
Using Experts to Value Assets
Some experts will be needed to place values on assets, like real estate. Or an accountant may be necessary to inform the court about the tax effects of the asset division. Your lawyer will need to work with experts in the field, so encourage their use. Will you need an expert to utilize Qualified Domestic Relations Orders (QDRO), or describe employee benefits, including stock options and Deferred Compensation?
Seeking Maintenance (aka Alimony) from a High Earner Spouse
For the non-working spouse and the one seeking maintenance (previously called alimony), your ability to prove your spouse’s income and assets is important. You may not be involved in the day to day processes of your spouse’s employment, but you can improve your case for spousal support by utilizing some tips:
1. GET DOCUMENTS.
First, obtain copies of all the financial records you can find. If there is a file cabinet in the house, go take a look. And then another look, and make all the copies you can. When I was an investigator at Pinkerton, this was one of the most common jobs I had to task. Everyone always looked for the paper statements and the savvy person is shredding documents as they come in.
So what can you do when the person is shredding everything? I’d ask them, are there any envelopes? Envelopes in the garbage can in the office? If necessary, go through your garbage for mail that has been tucked under the regular garbage. No one bothers shredding the envelopes that the mail comes in since they believe it contains no information. But they are wrong. Your lawyer can always subpoena the address on the envelope and find out what type of monies are in that account. One wife we represented found the mail in the trunk of her husband’s car.
Look for it, you will find it.
2. KEEP TRACK OF YOUR EXPENSES.
If you are the person paying the bills and believe the expenses are inflated, you’ll want to keep track of that too. If you aren’t the spouse paying the bills, it is easy to let this ride and for you to honestly be unaware of how much money you are really spending each month. You should know how much the babysitter or nanny is charging you, how much your mortgage is, how much the kids’ schooling is. No one faults you for not knowing, it is understandable that during your marriage that you trust one another and oftentimes, the couple breaks up the tasks in a marriage. You might not have been responsible for paying the bills, but if you are contemplating divorce, you need to make the money side of your marriage your business.
3. EDUCATE YOURSELF.
If you don’t know anything about your taxes, go see someone and find out. Contrary to your belief, nothing you learn will be “over your head.” You may not know what stock options are, or how they’ll be handled in your divorce, but the idea of stock options isn’t hard to learn. People in the financial world will meet with you and explain assets (likely to try and obtain your business later), and it is a good idea to meet with them. You can build financial relationships that you will keep for a long time.
4. BE REASONABLE.
I give this advice to both the stay-at-home mother (or father) and the working spouse. If you never lived off of $20,000 a month during the marriage, why is that your settlement demand? If you are the person making two million dollars a year, you need to understand that you didn’t get to this financial milestone by yourself. If your spouse wasn’t at home keeping the house, running the household, and caring for the children, you wouldn’t have been able to work 60 to 80 hours a week building your business or serving as a C-suite executive.
The working spouse is also better able to recover in a divorce, so while I don’t advocate giving your estate away, it cannot hurt to be a little generous to avoid the expense and anguish of litigating the case for five years.
Protect Your Assets with An Experience in High Asset Divorce Attorney
One of the easiest ways to protect your assets is to hire an experienced high asset divorce attorney who has experience with not only property distribution, but property distribution with high-income values. When you meet with your divorce attorney for the first time, have a conversation about their understanding of high asset and high earner divorce cases like yours. If you’ve gone and educated yourself a bit about stock options, you’ll be able to handle a conversation about them. See if your lawyer understands the problem and can offer solutions. Stay away from your friend of the family attorney who handles other areas of law. Complex issues that arise with high-income earners and high asset divorce require the expertise of an attorney that concentrates their practice in divorce and domestic relations. If you are facing the complexities of a high asset divorce, make sure you choose an attorney who can handle such matters to ensure the best outcome possible.
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