The financial issues in divorce fall along a continuum from simple to complex. High asset divorces, where the parties’ holdings may include complicated assets such as closely-held business interests, stock options, stock voting rights, deferred compensation, assets held in a trust, real estate partnerships, and tax benefits such as a capital loss carry-forward, can be particularly complex. Here are six things to keep in mind if yours is a high asset divorce:
- Hire an experienced family law attorney with a strong reputation for settling cases. The reason you want an experienced attorney is obvious, but the need for your attorney to be skillful in settling cases may be less so. When a divorce case is litigated, huge amounts of fees and costs can be incurred in establishing such things as the value of assets determined to the degree of certainty required by the relevant statutes and case law, and the equitable factors the court must consider in dividing property as enumerated in the statutes. However, in a settlement process such as negotiation, mediation, or Collaborative Divorce, creative and settlement-minded attorneys can craft a deal much less expensively. As one divorce attorney has been heard to say,” You can either pay me to litigate your case and help send my children to college, or you can settle, keep your money in your pocket and send your own kids to college.”
- Maintain trust. If you can maintain a positive relationship with your spouse during the divorce despite the inevitable anger and desire for revenge, you will be able to streamline the process significantly. This means taking care with your actions and your words from the very first conversation about the possibility of separating, and probably even prior to that. Remember that it will be very hard to rebuild trust once it has been destroyed. Looking for solutions that address common interests and that build in benefits for both parties will also help to preserve trust.
- Have realistic expectations. If you are the higher-earning spouse whose employment generated much of the assets, you may feel that you are entitled to keep most of them in the ultimate asset division. If you are the economically-dependent spouse, you may not want to assume any risk in connection with the assets you take from the marriage. In both situations, becoming informed about what the applicable law provides will help you to develop and maintain realistic expectations about the likely outcome in your case.
- Be creative in developing settlement options. Combining the skill sets of an experienced family law attorney and a knowledgeable financial professional will make it possible to develop creative options to settle the financial issues in your case. With a clear understanding of the interests of both parties, the professionals can craft options that maximally address both sets of interests. Dividing stock options acquired during the marriage provides a useful example. What if the options are not transferrable? What if the options only ”vest” at specified times and under specific circumstances which may never occur? These and other complexities can be successfully addressed in settlement options created by the legal and financial professionals in ways that a judge would not have the ability to do.
- Consider combining estate planning with your divorce settlement. Particularly if yours has been a long-term marriage, you may want to consider doing estate planning in conjunction with the resolution of the financial issues in your divorce. This might include planning for children and grandchildren, or for charitable giving. If this objective appeals to both you and your spouse, you may need to bring in a Trusts and Estates attorney to help with the crafting of the settlement agreement.
- Special care is required if there are inherited assets or assets acquired prior to the marriage. One of the first questions your divorce attorney will ask relates to how and when assets were acquired. Whether assets are “separate” or “marital” assets can be complicated both to understand and to prove. Documentation to establish the answers to these questions will need to be carefully and methodically pursued.
If the value and complexity of the assets in your divorce are significant, selecting the appropriate professionals and maintaining trust with your spouse will help you achieve a better outcome.