Despite the current cooling in the national economy, there are more wealthy people in America now than ever. Opportunity blooms right now and right here more than any other place or time in history. At the same time, divorce is a reality for many people. Divorce for people with high net worth is different in many ways than for people with less property and less income. Property division in a large marital estate can be complex due to the nature and amount of assets that make up the estate. The motivation of the parties to retain assets during the divorce and the ability to pay for expensive legal proceedings also factor into the divorce equation.
Hire an Experienced High Asset Divorce Attorney in Fort Worth
One of the most important things to consider when getting a high-net-worth divorce is to hire an experienced high-asset divorce attorney who understands the nuances of property division in Texas. Your attorney should have experience working with clients with significant assets and be well-versed in the complexities of property division in high-net-worth divorces. An experienced attorney can help protect your assets and ensure you receive your fair share of the marital property.
Why High Net Worth Divorces Are Different
Divorces involving high-net-worth individuals are inherently more complex than those with less wealth. This is because the assets involved are typically more valuable and diverse, and there may be a higher level of emotional attachment to those assets. In addition, high-net-worth individuals may have more complicated financial structures, such as business ownership, multiple properties, and investments, which can further complicate property division in a divorce.
The motivations of the spouses can also have a significant impact on the divorce. When one spouse earns most or all of the household income, the other spouse may need to secure as much of the marital estate as possible to fund life after the divorce. Typically, spouses in a high net-worth divorce prioritize different assets in the marital estate. For example, a high-earning spouse may prioritize equity in assets that will produce greater value in the future. In contrast, the other spouse may be focused on liquid assets to secure new living arrangements. At Youngblood Law, PLLC, we have experience working for clients on both ends of the financial priorities spectrum.
Identifying and Valuing Assets
One of the most critical steps in property division in a high-net-worth divorce is identifying and valuing all assets. This includes both community and separate property. Community property is any property acquired during the marriage, while separate property is property acquired before the marriage or property acquired during the marriage through inheritance or gift. Accurately valuing all assets is crucial to ensuring each spouse receives a fair and equitable share of the marital estate. This may require the assistance of financial experts such as appraisers, forensic accountants, and financial advisors.
The formal process of investigating the full extent of assets and other divorce-related information is called discovery. Discovery can be complicated with a large, complex marital estate with diverse assets. A robust discovery process can cost thousands of dollars in legal fees, but getting the facts about what is in the estate is requisite before decisions about a fair division of assets can be made.
Protecting Business Interests
For high-net-worth individuals who own a business, protecting their business interests during a divorce is essential. This may require determining the company’s value, identifying ownership rights, and protecting intellectual property. It is also necessary to have a plan in place for the continued operation of the business following the divorce.
A business started during the marriage is community property in Texas, even if one spouse never had anything to do with the company. A sharp division of a business depends on the type of business, the ownership split, the assets in the business, accounts receivable, accounts payable, inventory, intellectual property, and other factors. Before embarking on a legal strategy to divide the business in a divorce, a savvy family lawyer will work up a cost/benefit analysis for the client based on information gathered about the company during discovery. An in-depth assessment of the value to the client is crucial to saving time, money, and effort in pursuing an insolvent business. A lawyer who understands the difference between top-line revenues vs. the profitability of a business is required.
Retirement Accounts and Benefits
Retirement accounts and benefits are often a significant part of a high-net-worth individual’s assets. These may include 401(k)s, IRAs, pensions, and other retirement accounts. Understanding how these accounts are valued and divided in a divorce is essential. This may require the assistance of a financial expert who can help ensure that each spouse receives their fair share of the retirement accounts and benefits.
At Youngblood Law, we routinely employ a Certified Divorce Financial Analyst to help educate our clients on the complexities of different financial accounts. Because annuity-like assets like pensions or military retirement assets are worth more in real life than the monthly statement reflects, input from professionals in the financial industry is valuable to help clients make decisions about a fair division in a divorce.
Real Estate and Property Division
Real estate can be a particularly challenging property division aspect in a high-net-worth divorce. It is vital to have an accurate valuation of all real estate holdings and to determine ownership rights. This may include primary residences, vacation homes, rental properties, and commercial properties. Sometimes, selling properties and dividing the proceeds between spouses may be necessary.
An interesting aspect of high-net-worth divorce is the sale of the marital residence. Selling a home valued in the seven figures or more is fundamentally the same as selling any other home, but the realtors experienced with selling such homes will make it easier to sell. For every house that would sell for $1 million, there are hundreds of houses for sale in the $220,000 range—and a lot more people who can afford a home in the $220s.
Spousal support is payment from one spouse to another following a divorce. These payments may be awarded based on factors such as income, earning capacity, and length of the marriage, among other factors. In Texas, spousal support is intended only to help a spouse meet their reasonable minimum needs for a relatively short period. In high-net-worth divorces where one spouse has been a stay-at-home spouse for a period of years, that spouse may need spousal maintenance to make ends meet while he or she gains new education or skills to help re-enter the workforce. In a high-net-worth divorce, spousal support can be particularly complicated, as the amount of support may be substantial and may have tax implications.
Pre-Nuptial and Post-Nuptial Agreements
Pre-nuptial and post-nuptial agreements can be valuable tools for high-net-worth individuals who want to protect their assets in the event of a divorce. These agreements can specify how assets will be divided and may address issues such as spousal support, property division, and business ownership. It is essential to have a knowledgeable attorney who can assist in drafting and negotiating these agreements to ensure that they are legally binding and enforceable.
If a pre-nuptial or post-nuptial agreement is in effect when a divorce is filed, we recommend having your competent family lawyer review the document. Texas law places requirements on marital agreement documents. If those are not met, the documents may not control the property division as expected.
Protecting Privacy and Reputation
High net-worth individuals may be particularly concerned about protecting their privacy and reputation during a divorce. Publicity in some highly contentious divorces can affect the career of one or more of the spouses. For example, in a divorce involving a professional athlete, allegations of family violence could lead to a termination of the athlete’s contract, thereby destroying his or her ability to continue making a large salary. Likewise, in corporate America, the wrong allegations made public in a divorce could lead to suspension or firing, dramatically affecting the marital estate. It is crucial to work with an attorney who understands the importance of confidentiality and can help ensure that sensitive information is not disclosed in court filings or during the divorce process.
At Youngblood Law, PLLC, we are trained in the collaborative divorce model and use it whenever possible. A key advantage of the collaborative model is the privacy it affords since the negotiations occur outside of the Courtroom. Additionally, the collaborative method is that the actual agreements of the parties need not be filed with the Court and do not become part of the public record. While other ways of expediting divorce are available for lawyers who focus on client outcomes, the collaborative model can be the most private.
Contact a Fort Worth High Asset Divorce Attorney
In conclusion, a high net-worth divorce can be complex and challenging, but with the right legal team, you can navigate it successfully. At Youngblood Law, PLLC, we have extensive experience representing high-net-worth individuals in Tarrant County, Texas, and we understand the unique challenges of dividing property in a divorce.
Our team of skilled Fort Worth high asset divorce attorneys and financial experts we bring in on cases to assist with analysis will work tirelessly to ensure that your assets are protected and that you receive your fair share of the marital estate. We understand the importance of confidentiality and will take all necessary steps to protect your privacy and reputation during the divorce process.
If you are considering a high net-worth divorce in Tarrant County, Texas, please get in touch with us today. We offer a range of legal services tailored to meet the unique needs of our clients, and we are committed to helping you achieve the best possible outcome in your divorce.