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Recent Blog Posts
Periodic or Lump-Sum Settlement: Which Alimony Payment is Best?
A common stipulation in high-asset divorces is alimony, also known as spousal maintenance. Alimony is money that one spouse is court-ordered to pay the other spouse. Unlike child support, alimony is completely up to a judge's discretion. In September 2011, Texas HB 901 amended the rules regarding alimony in this state, including increases to the amount and length of time a spouse may be entitled to spousal maintenance.
Traditionally, there are two ways alimony payments can be made in high-asset divorces—either periodic alimony (which is paid on an established schedule i.e. monthly) or in a lump-sum payment. There are benefits and disadvantages to each of these two methods, and an experienced complex litigation attorney can help determine which is best for your situation.
Sharing All Financial Decisions Could Make for a Happier Marriage
A recent survey suggests that couples who share financial decisions are happier than couples where only one partner handles all money matters. Sharing those financial decisions also makes it more difficult for one spouse to hide money from the other, which often helps with negotiations during high-asset divorces.
The survey involved just over 2,500 participants who were either married or in long-term relationships, and were also classified as "high-net worth investors." The survey revealed that although the majority of the couples said they shared financial decisions with their partner, the responsibilities appeared to be gender specific, especially when it came to making decisions on investing. While women in high-asset marriages were equally involved in the day-to-day decisions, they were often not actively involved in the investing decisions. Those decisions tend to be made strictly by the men, even for younger couples.
Children of High Asset Divorce Suffer Most from Parent Breakup
There have been numerous studies done regarding the effects that divorce has on children. Several studies have concluded the negative impact parents breaking up have on children. However, a new study has found that it is actually children of high asset divorces who suffer the most from their parents' breakup.
A team of researchers from Georgetown University and the University of Chicago analyzed data that was taken from the National Longitudinal Survey of Youth (NLSY). That federal survey initiated in 1979 in order to examine how children are affected by family changes, such as divorce or separation. In 1986, the NLSY survey team also began assessing children born to women who were participating in the survey. The women were asked questions to determine the socio-economic state of their children. The assessments were conducted every other year until 2008, when the children reached 12 years of age.
Domestic Abuse in High-Asset Divorces
Every day in this country, three women die because of domestic violence. Every year, more than 10 million women and men are victims of domestic violence—that is 20 victims per minute. One in three women and one in four men have been victims of domestic violence.
October is domestic violence awareness month. One of the things we need to be reminded about is that domestic violence does not discriminate. Victims come from every walk of life and every socioeconomic background. Even a spouse who is involved in a high-asset divorce can be a domestic violence victim.
There are steps that all domestic abuse victims need to take to get away from the abuser. It is critical to have a safety plan in place. One resource for victims is the National Domestic Violence Hotline (1-800-799-7233) which has safety advocates available 24 hours per day. Any person accessing the hotline, or any websites in an effort to formulate a safety plan, needs to be very cognizant of the fact that his or her abuser may be monitoring their phone or computer. Therefore, use devices that cannot be monitored such as a friend's phone or a library computer.
Utilizing a QDRO to Collect Back Support in High-Asset Divorces
It is a frustrating reality of divorce, but many ex-spouses do not honor the terms of their high-asset divorce settlement, especially when it comes to child support and/or spousal support. After what can be months, or even years, of drawn-out, complex litigation, the support checks the obligor spouse is supposed to pay stop coming, sometimes before the ink is even dry on the divorce decree.
Trying to collect back alimony or child support funds from an ex who refuses to pay often involves even more litigation and more legal expenses. However, one tool that many high-asset divorce attorneys are beginning to utilize in order to assure their clients receive the assets they are entitled to is the Qualified Domestic Relations Order (QDRO).
How to Protect Your Assets before You File for a Complex Divorce
One of the most important steps you can take before filing for a complex divorce is to protect your assets. This is especially critical if you expect the divorce to be contentious, and involve complex property litigation and other high asset issues.
To begin, make copies of all important financial documentation and paperwork from the past five years. Keep the documents in a safe place where your spouse will not be able to access them. Be sure to collect records of any bank accounts, investment portfolios, mortgage payments, retirement accounts, credit card statements, insurance policies, and income tax returns. Also, make copies of deeds to all properties owned by you and your spouse, as well as copies of titles to any vehicles and boats. These documents will help your attorney prepare your financial affidavits, as well as provide an accurate record of all the assets that make up the marital estate.
High-Asset Divorce May Trigger IRS Audit
For many people, going through a high-asset divorce can be a very emotional and frustrating time. They often cannot imagine dealing with anything that could be similar, or even worse, than the divorce process. However, there is an all too common occurrence many high-asset divorce litigants find themselves in—an audit by the Internal Revenue Service (IRS).
The IRS maintains one of the largest databanks in this country. The databank is not connected to any Internet server due to the classified information. But the agency is very much aware when someone gets married (tax returns must be filed either under married filing separately or married filing jointly) and when someone gets divorced (tax returns are filed either single or head of household).
Property Appraisals Critical in Complex Divorce Cases
If you are involved in a high asset divorce that involves complex property litigation, it is essential to have an accurate value of the property since it is all part of the marital estate. The estate will be divided between you and your soon-to-be ex-spouse. Therefore, you will want to ensure that all property, to which you are legally and financially entitled, is received.
To begin, you will first want to obtain a property appraisal for all properties owned by you and your spouse. Property values fluctuate; hence, make sure you have the most up-to-date dollar value. If not, you could be hurt financially if the market dropped since the last appraisal was completed.
As an example, let us say you want the vacation home you and your spouse co-own. The home was originally appraised in 2010 for $1 million. However, the most recent property appraisal shows the property is now worth $900,000. Had you gone with the old figure, you would have paid your spouse an extra $50,000 in equity. Additionally, you could also lose out if your spouse wants the property and you are paid the equity but are not using up-to-date property appraisal amounts and property prices have risen. Thus, this could mean less equity for you.
Another way to determine what a property is worth is to have a Comparative Market Analysis (CMA) done. A CMA looks at similar properties that have active listings, pending listings, and have recently sold. All properties reviewed are located in the same area as the property being evaluated. Most CMAs are performed by realtors.
Is Your Spouse Hiding Assets?
In many high asset divorces, one spouse will attempt to hide assets from the other spouse with the intention of denying that spouse his or her rightful share of the marital estate. However, an aggressive complex divorce attorney representing you decreases the odds of your spouse getting away with not disclosing his or her true financial worth.
There are steps that an attorney will take to uncover those hidden assets. Requesting your spouse's pay stubs, tax returns, cancelled checks, bank statements, brokerage account statements, and any other deposit accounts, as well as credit card statements, are all part of the discovery process. Those documents will be closely studied to see if there are discrepancies between what your spouse is claiming he or she has and what the documents say they have.
Protecting Your Assets in a Complex Divorce
It is a common scenario for couples who are facing a divorce: after years of being married and working together to pool resources and plan for retirement, a divorce leaves you suddenly looking at those golden years with half of those resources—possibly more—gone. Protecting your assets in a complex divorce case can be crucial for you financial future.
In a survey that was done by the National Foundation for Credit Counseling (NFCC), 25 percent of the married participants said they would keep financial secrets from their spouse. How would your spouse answer that question?
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