high net worth divorce attorneys in Pensacola
All divorces are difficult, and nearly every couple faces various emotional and financial challenges during the process. When the couple has a significant amount of assets, however, things can become a lot more complicated. It could be a situation where one spouse has a large net worth and the other is a stay-at-home parent, or it could be that both spouses are affluent and financially successful. If you are in either of these situations, you need a firm that has specific experience dealing with the complexities of high asset divorces.
At Whibbs, Stone & Barnett, P.A., we have several decades of experience helping clients in the Pensacola area who are going through a divorce, and those dealing with all other types of family legal matters. Our attorneys have represented numerous high net worth clients in divorce cases, and we have extensive experience with the complicated issues that often arise. Our in-depth knowledge of related areas of the law, such as real estate and estate planning, allows us to show our clients the bigger picture and develop the most appropriate legal approach based on their unique needs and concerns.
Common Issues with Pensacola, FL High Net Worth Divorces
A high asset divorce can have major financial ramifications for the spouses. Some of the most important financial matters that these couples encounter include:
Valuation and Division of Family-Owned or Closely Held Businesses
Many affluent couples own a business together. When the marriage ends, the couple will need to decide whether to continue as business partners, let one spouse keep the business while the other receives an equitable share of other assets, or sell the business outright and split the proceeds.
Whatever path is chosen, there could be serious disagreements over what the business is actually worth. In a case like this, it is important to apply the proper valuation method, which will likely require the assistance of a professional business appraiser. Business valuation methods may include cash flow/earnings, asset value, market value (e.g., what other comparable businesses are selling for), or a combination of these.
Valuation and Division of Interest in Professional Practices Owned by One Spouse
It could be that the business is owned by one of the spouses and the other has very little (if any) involvement in it. This is a common scenario with professional practices such as medical or dental clinics. Dividing a business or practice owned by one spouse will present some unique challenges.
First of all, valuation can be difficult because much of the value may be tied up in the services provided by the person who owns the practice. Secondly, there could be other business arrangements to consider, such as a professional practice with multiple partners/owners. Partnerships like these typically have buyout clauses and other provisions that protect the partners from outsiders (such as spouses) becoming owners. These and other issues must be taken into account during the division of marital assets.
Division of Interest in Multiple Real Estate Properties
It is not uncommon for a high net worth couple to own several pieces of real estate. For example, they might have the marital home along with one or two other vacation homes. In addition, they might have some rental properties – maybe a few homes, apartment complexes, or even commercial real estate. This property must be divided in a way that is fair and equitable for both spouses.
Accurate Valuation of Complex Assets and Investments
The spouses may have assets and investments with more complex structures. For example, a spouse may have stock options from the company he/she works in that are worth very little on paper but could be cashed in for a significant amount later on. The spouses may also have various stocks, bonds, annuities, trusts, retirement accounts, and even international investments.
Complex assets must be properly valued by experts with consideration given not only to their present value, but also to their potential value in the future. There may also be special requirements for various assets to be divided. For example, certain types of retirement accounts must include a qualified domestic relations order (QDRO) to be divided as a marital asset without a tax penalty.
Accurate Valuation of Unique Assets
One or both spouses might have assets that are rare, unique, or one-of-a-kind. These may include art collections, rare coin collections, high-end jewelry, or classic automobiles. Unique assets like these will usually require an appraiser with specialized knowledge of their value.
Uncovering Hidden Assets
When there is a lot of money at stake, one of the spouses may try to hide assets from the other so they will not be included in the marital property division. This scenario is most common when there is a large income disparity between the two spouses and/or one spouse is in charge of handling the finances in the marriage.
If one spouse suspects that the other is hiding assets, a forensic accountant might need to be brought in to trace and uncover any undisclosed assets. It should also be noted that if a spouse engages in this type of behavior, Florida family courts have the ability to punish them for frustrating the court’s ability to fairly and equitably distribute the marital property.
Receipt of Alimony/Spousal Support
If there is a major income disparity between the spouses and they have been married for a significant length of time, there is a good chance that the lower earning spouse will qualify for alimony. Alimony is not guaranteed, however, and there are a number of factors the court considers in deciding whether a spouse is entitled to it.
Child Support for High Earning Parents
In Florida, child support is calculated based on a couple’s combined monthly net income. If a couple’s combined net income is more than $10,000 per month, then the receiving parent is paid the amount of support provided by the guidelines plus a percentage of the amount of income over $10,000. For one child, the percentage is 5%, for two children, 7.5%, three children, 9.5%, four children, 11%, five children, 12%, and six children, 12.5%.
This formula is usually reasonable, but it could be excessive in cases when one parent has a very high monthly income, one that exceeds six figures, for example. Let’s say one of the spouses earns $800,000 per month and the couple has one child. In this scenario, the presumptive child support payment would be $40,000 per month. However, a court might find this amount to be inappropriate and adjust it downward. Whatever side of the case you are on, you will want a good lawyer arguing for your best interests.
Whenever you divide (or sell and divide) complicated assets like those that are common in a high net worth divorce, you are almost certain to encounter some tax consequences. For example, the sale of businesses or real estate could trigger capital gains taxes. You should also keep in mind that the paying spouse is no longer allowed to deduct alimony payments on federal taxes, solution to be accounted for. Before agreeing to the division of marital property, be sure to have everything examined by a tax professional so you do not encounter any unpleasant surprises at tax time.
The division of marital property could be governed (at least in part) by the terms and conditions of a prenuptial or postnuptial agreement. But if such an agreement exists, it must be legally enforceable. This means, among other things, that it is written (not oral), signed by both parties in the presence of a notary, executed voluntarily by both parties, and not unfair or unreasonable to one of the parties. If the document meets these requirements, it will most likely be used as the primary guideline for the property division.
Contact an Experienced Pensacola, FL High Asset Divorce Attorney
Going through a divorce is a stressful time for everyone involved, but this is especially true when there are significant assets at stake. If you are in this circumstance, you need strong legal counsel by your side advocating forcefully for your rights and interests. In Pensacola and the surrounding Florida communities, contact Whibbs Stone & Barnett for assistance. Call our office today at 1-888-219-4561 or message us online for a personalized consultation with a member of our legal team. We look forward to serving you!