DuBois Cary — King County Divorce Lawyers Who Represent Individuals With High Assets
High asset divorce cases can be complicated: How do we sort all this out?
In high asset cases, there are always challenges in gathering financial data and analyzing possible outcomes. In addition to valuing assets like homes, commercial real estate and stock portfolios, you must consider the value of stock options, stock grants, intellectual property, and businesses or professional practices. You must also take into consideration the possible tax consequences of various property distribution scenarios. And then there are valuable pieces of personal property such as art or other collections. Gathering this information and determining the best way to divide and distribute your assets almost always requires experts from various disciplines.
If you are heading into a divorce and you have significant assets, you need a family law attorney who has long-standing relationships with a team of experts. The types of experts you will most likely need include a CPA who has testified in divorce trials, a business valuation expert, a real estate appraiser – both commercial and residential — a business lawyer, and sometimes subject matter experts such as experts in intellectual property or patents.
Beware of divorce lawyers who purport to be able to provide all of the services you need, from business advice, to accounting, to business valuations. You don’t expect your surgeon to provide surgery, anesthesia, pathology and rehab; don’t expect the same from a family law lawyer.
Pre-divorce planning is critical in a high asset divorce. The more you can provide your lawyer with a complete picture of your finances the better. You will need tax returns, bank and investment records and business financial records. But don’t panic. You don’t have to gather everything yourself. Accountants and bookkeepers usually have most of the data you will need to get started. Then you and your lawyer will provide these documents to the valuation expert. You can expect initial meetings with the experts who will have many questions about your business. Be sure to choose a lawyer who facilitates direct access to your valuation expert so that you can have your questions answered quickly and thoroughly.
Community and Separate Property
In Washington all community, and sometimes even separate, property is up for division in a divorce. There is very specific case law that defines community and separate property. Your lawyer should question you carefully at the onset of your case to determine whether a separate property claim should be pursued. If you intend to claim that a particular asset is separate, it will be your burden to provide admissible legal proof on this issue.
Prevailing on a separate property claim almost always requires the testimony of a forensic CPA who has experience in tracing assets. Be sure your lawyer has forensic accountants as part of her team if you believe you have a potential separate property issue in your divorce.
Separate property claims are among the stickiest of all property claims in a divorce. Tracing these interests is tedious and painstaking. You need a highly detailed CPA who can write a strong report and testify in court if necessary. Your lawyer should be prepared to bring your CPA to mediation when separate property is an issue. The burden of proof on making a separate property claim is quite high, so this is an area where you definitely want a seasoned expert on your side.
Many individuals with substantial assets enter into prenuptial agreements. Interpretation of these agreements can be tricky business. Your lawyer should review your pre-nup and advise you if she believes your pre-nup is at risk for attack. This is not something you want to discover in settlement negotiations, or sitting in the courtroom.
In most high asset divorces, spousal maintenance is an issue. An award of maintenance, also known as alimony, is typically based on the need (of the receiving spouse) and the ability to pay. Of course the length of the marriage plays into this. It’s pretty unlikely that a short-term marriage will result in a large maintenance award.
When there are substantial assets, the property award is usually taken into consideration. For example, if a spouse is walking away with income-generating assets, or a large liquid account, he or she may not “need” maintenance. This is where your experts will come in handy by being able to analyze the asset base to determine what kind of income could be generated.
Career enhancement is a term used to acknowledge that oftentimes one party sacrifices career opportunities so that the other spouse can fulfill his or her career. At the time of divorce, the party that sacrificed a career may be compensated with more assets or substantial maintenance to make up for the loss he or she sustained so that the career of his or her spouse could expand.
If you and your spouse have moved around a lot to follow one spouse’s job, you may be faced with a career enhancement issue. If you are in this position, you need to have a legal team who can analyze the future income-earning potential of the spouse who gave up his or her career. You may need a vocational expert who can address the issue about the ability of the lower wage-earning spouse to get back into the workforce in a meaningful way.
The wild card in all divorces, but especially in high asset divorces, is who your spouse retains as counsel. This is probably one of the biggest factors in how easy, or difficult, your divorce is going to be. Most experienced lawyers who deal with high asset cases can tell early on about how a case will come out once they have a handle on the assets and the finances. Inexperienced or highly contentious lawyers typically cause unnecessary trips to the courthouse and endless correspondence and meetings with experts. And that means more of your valuable time has to be devoted to dealing with burdensome issues instead of moving forward with your life and your business. You should do whatever you can to encourage your soon-to-be-ex to retain a lawyer who is professional and willing to work toward settlement. If that is not the case, be sure the lawyer you hire is ready to go the distance for you. You will need someone who has a good track record in trial and motions practice.
Community-Owned Businesses / High Level Executives
If your marital community owns a business, you will definitely need a business valuation expert. There are several in the area, with whom the courts are very familiar. Be sure your lawyer has a good relationship with a business valuation expert, so your case will get high priority treatment.
If you are a senior executive, you have benefit packages that must be disclosed and often stock options or awards that have to be considered in your divorce. (And there should always be a determination early in the process as to whether the stock is a separate or community asset!)
As a business owner or senior executive, you have a demanding lifestyle. When you gather your legal team, you want to be sure to find a law firm who understands what it took for you to attain your position and the importance of the fact that you must be available to handle the demands of your career even though you are going through a divorce. This is not a time you can afford to lose focus.
The stress of a divorce should not be confounded by having a legal team who does not understand the burden of a career with heavy responsibilities. We have found that evening and weekend availability of a legal team is a must for most business owners and high level executives going through a divorce.
We Are Here to Help in Your High Asset Case
At DuBois Cary Law Group, our forensic accountant experts will work hard for you to analyze and present your financial data and help determine the tax consequences of various settlement possibilities. And they can help to develop a future earning stream analysis to demonstrate how the lower wage earning spouse can take care of him- or herself into the future.
We often associate on high asset cases with business lawyers who have significant expertise in drafting the legal agreements you will need to split businesses or to go forward in your own business as a non-married owner. Buy-out provisions in high assets business cases typically require business lawyers with specific expertise in this area.
Often we retain a vocational expert to determine the best way to get the lower wage earning spouse back into the job market if that seems to be a reasonable possibility. These analyses are very helpful to the judge should your case end up in trial and you want to make an argument about future employment of the opposing party, or even yourself, if you are the lower wage earner.
The bottom line is that high asset cases not only require a family law attorney who is experienced with these cases, but an entire team of experts who should be readily available to answer your questions and work with your lawyer to provide creative and workable solutions to your unique situation. We have been practicing in this area for over 20 years, and have longstanding relationships with good lawyers and forensic experts who appreciate our business and give our clients top-notch service. We would be happy to meet with you at your convenience to discuss your legal issues.
If you have further questions or want to arrange a confidential consultation, please contact us today. We have offices in Seattle and Bellevue and can meet with you in one or both of those locations as needed. We look forward to meeting you and helping you achieve the solutions you seek.