Do you or your spouse own a successful business? Do you own commercial real estate? Are you in the highest tax bracket? If the answer is “yes” to any of these questions and you are considering divorce, you may have what’s known as a “high asset divorce.” High asset divorces raise special issues that must be addressed to protect your interests. The experienced lawyers at Kathleen M. Newman Family Law have special expertise in high asset cases.
What are some of the main risks and related solutions?
1.) Failure to identify all income/assets. High income and asset divorces usually involve sophisticated financial record keeping and increase the risk of inadvertently missing something. Before a divorce begins, locate and protect critical financial documents, including financial statements, bank and credit card records and tax returns. In high asset divorces, it is often necessary to retain a financial expert, including investigative accountants, to look into the marital finances.
2.) Intentional concealment/misrepresentation. In many high income and asset divorces intentional concealment/misrepresentation by a spouse is an issue. This can be particularly true where a spouse owns/operate a business. In contrast to the W-2 income of an ordinary employee, a business owner, faced with a divorce, can artificially decrease income with the goal of diminishing spousal maintenance. Manipulation of financial data can reduce the business value, negatively impacting the non-business owner’s property settlement. It is of critical importance to get the financial records of the business and have an experienced business valuation expert accurately assess income and business value.
3.) Hidden liabilities. High asset divorces often have complicated debt situations. The liabilities may not be obvious and can include existing personal or business tax liabilities, future tax liabilities, and other debt often buried in lengthy agreements like guarantees which you don’t remember signing years ago at a closing or credit card debt on which you are a signer. Tax liabilities, guaranty obligations and similar debt issues need review by experienced legal counsel.
4.) Inadvertent loss of assets. More assets increase the risk of loss for both spouses simply because something drops through the cracks. Lapse of insurance coverage on an asset is a common example. Tip: gather all insurance policies and provide them to your attorney.
Take away: High asset divorces pose special risks requiring creative solutions. At Kathleen M. Newman Family Law, our lawyers are skilled at representing clients in such cases. Please contact us to schedule a consultation to review the specifics of your situation.
“Finding Hidden Assets In A Divorce,” Forbes (Mar 8, 2019).
“40 Secrets Only Divorce Attorneys Know,” Huffington Post (December 6, 2017).