Divorce can be challenging for anyone. It can be particularly complex for those with significant assets and complex financial holdings. As a high-net-worth individual going through a divorce, you face unique challenges requiring a skilled legal team. In Tarrant County, having a knowledgeable attorney is essential to protect your interests.
Here are some considerations that you should keep in mind when getting a high-net-worth divorce
High net worth divorces often involve significant assets, including business interests, real estate, stocks, and investments. The size and complexity of the marital estate create numerous options for the spouses when it comes to dividing the couple’s property. It’s critical to work with an experienced attorney who can help you value these assets accurately. Our team has extensive experience working with forensic accountants and financial experts to ensure all assets are accounted for and properly valued.
All assets are not created equally when it comes to their net value. It’s also important to consider any potential tax implications when dividing assets. Tax consequences may need to be considered depending on the type of asset and how it’s divided. For example, $100,000 in cash has a value that is different than $100,000 in 401(k), which comes with early withdrawal penalties and tax consequences for the year of withdrawal. An experienced attorney can help you navigate these issues and ensure you receive a fair division of assets.
Texas Courts are required to order a “just and right” division of the estate, but often the Court starts with a presumption that splitting assets “down the middle” is fair. However, there is no requirement in the Family Code for the division of each asset. Instead, the Code allows for a division of the whole marital estate. So full assets can be awarded to the respective spouses to minimize waste and cost of dividing assets.
Another benefit of dividing the estate, rather than dividing each asset, is that spouses can leave the marriage with the parts of the estate they prioritize. For example, one spouse might get to keep the house and all its equity while the other keeps their 401(k) entirely rather than dividing both assets by a sale or division. A savvy, experienced family lawyer will learn from the client which assets the client prioritizes and builds a strategy around the client’s goals.
Dividing a Privately Owned Business in a Texas Divorce
Dividing a business during a divorce can be one of the most challenging aspects of a high-net-worth divorce, especially if both spouses are actively involved in running the business. Indeed, equitably dividing the business is crucial if the company is the primary or only source of income for the family. If you or your spouse own a business that must be divided during your divorce, working with an attorney with experience handling these types of cases is essential.
One of the first steps in dividing a business is to have it valued by a professional business evaluator. This can help ensure that the company is divided fairly and that both spouses receive an appropriate share of the business’s value. A business evaluator will consider various factors when valuing the business, including its assets, liabilities, cash flow, and market conditions.
Once the business has been valued, the next step is determining how it will be divided. Depending on the circumstances, the business may be sold and the proceeds divided, or one spouse may buy out the other spouse’s share of the business. Many successful businesses have formal operating agreements that determine the business’s management process in the case of a divorce. Many other businesses do not have operating agreement documents. Either way, dividing a privately owned business in a divorce can be complex. With so much riding on how the company is divided, hiring a law firm with business division experience makes sense.
Youngblood Law, PLLC understands the options and opportunities for dividing a business in a divorce. Our team can work with business evaluators, financial experts, and other professionals to help ensure that the business is valued accurately and that all factors are considered when developing a division strategy. We work with you to create a strategy that protects your interests and ensures that you receive a fair outcome.
Texas is a non-alimony state. However, Texas law does allow for post-divorce spousal maintenance in some circumstances. In Texas, spousal support is not guaranteed. Instead, the courts consider various factors when determining whether to award spousal support, the amount of support, and the duration of the support payments. These factors include the length of the marriage, the earning potential of each spouse, property owned by the spouses, and several other factors. Our team can help you understand the spousal support laws in Texas and develop a strategy to ensure that you receive a fair outcome.
It’s essential to work with an attorney who understands the nuances of spousal support laws in Texas and can help you develop a strategy to ensure that you receive a fair outcome. This may involve negotiating with your spouse or presenting evidence in court to support your position.
A key point to remember is that spousal support is meant to help divorcing spouses provide for their “minimum reasonable needs.” This requirement does not mean that the Court is obligated to award spousal maintenance to maintain the standard of living a spouse enjoyed during the marriage. When the issue of spousal maintenance is likely in a high-net-worth divorce, an experienced family lawyer will advise the client on legal and practical strategies during the proceedings to help the client achieve their goals regarding spousal support after the divorce.
If you have children, child custody will likely be a significant concern in your divorce. In Texas, the courts focus on the child’s best interests when deciding custody. Of course, what is in the child’s best interest is often in dispute. Typically, each parent has an idea of the best interest of the children, and the Court has its own judgment.
There are two main differentiating factors in high-net-worth divorces related to children. The first is the increased expenses and activities of the children. High-net-worth couples often have their children in numerous activities and hobbies, some of which can be expensive. Likewise, tuition for private schools and costs of personal instruction factor into the overall parenting plan for the children. Sometimes, in a high-net-worth divorce, parents must make hard choices about child-related expenses since those activities may be too much of a financial burden post-divorce.
The second is the work requirements and parenting roles of the parents. Many high-net-worth households feature a single “breadwinner” and a stay-at-home parent. The parenting plan should always focus on the children’s success, but the post-divorce realities of work schedules, days off, work-related travel, and more for the parents will directly affect the parenting plan. For example, a stay-at-home parent may need to rejoin the workforce after the divorce to provide for themselves and the children. This transition can be difficult for a former stay-at-home parent accustomed to spending the whole day with the children.
At Youngblood Law, PLLC, we believe that the primary duty of an attorney is to advise the client of the truth of their situation, even when the truth is hard to hear. We can speak from experience about options, opportunities, custom possession schedules that work around parents’ work schedules, and more. Our team can help you develop a custody plan that works for your family’s unique circumstances. This may involve negotiating with your spouse, presenting evidence in court, or working with a mediator to reach a mutually beneficial agreement.
High-net-worth divorces often involve significant public attention, which can be stressful and embarrassing. Keeping divorce proceedings as quiet as possible can prevent unwanted attention from employers, the media, and nosey neighbors. In some cases, public exposure of legal drama can affect people’s careers.
Whether you are a celebrity, professional athlete, business executive, or owner of a business with shareholders, keeping your divorce as private as possible can help avoid unnecessary stress and drama in your life during the proceedings. While divorces are public record, experienced lawyers offer alternatives to the typical divorce court drama. The collaborative divorce model, for example, streamlines the divorce process, and the agreements between the spouses that settle the divorce are kept private.
Related to privacy concerns is the risk of damaging allegations. In this context, privacy is not the primary concern, but because many high-net-worth people have high-profile careers, keeping allegations private can help preserve the marital estate. Experienced lawyers build a strategy around their clients’ goals. It is crucial to advise clients about the risks and rewards of competing legal strategies and tactics related to the client’s overall goals. Good lawyers can be trusted to avoid legal strategies and tactics that offer short-term rewards while risking long-term goals. For example, making allegations during the proceedings that could end your spouse’s career could prevent your spouse from having the funds necessary to pay for the living expenses you require. A good lawyer would advise about that risk before bringing the issue up in Court.
Our team is committed to protecting your privacy and can help you navigate the divorce process with as much discretion as possible.
Divorce can have significant tax implications, particularly for high-net-worth individuals. Working with a financial expert or accountant is essential to develop a strategy that minimizes your tax liability and protects your financial interests. This may involve structuring the division of assets in a particular way or taking advantage of certain tax deductions or credits.
State-level District Court does not preempt the Internal Revenue Code. So, tax deductions, exemptions, penalties, deadlines, et cetera cannot effectively be reassigned by a divorce decree. While spouses may reach agreements regarding tax issues, in all cases, the I.R.C. prevails. Competent attorneys advise about the truth of “dividing” taxes. Most family lawyers are not qualified to give detailed tax advice regarding property in the divorce because most family lawyers are not tax lawyers. But qualified family lawyers consult with Certified Divorce Financial Analysts, tax attorneys, accountants, business valuators, and other professionals to give their clients a well-rounded view of the tax situation before significant decisions are made in the divorce.
Overall, a high-net-worth divorce requires careful planning and attention to detail. Working with an experienced attorney can help ensure that your interests are protected and that you receive a fair outcome. At Youngblood Law, PLLC, we understand the unique challenges that high-net-worth individuals face when divorcing. We are committed to providing personalized and effective legal representation. Contact us today to schedule a consultation and learn more about how we can help you navigate the divorce process.