Divorce can be a tough process for anyone. As board-certified attorneys in family law, our job is to prepare our clients for the divorce process and minimize the chance of surprises along the way.
For affluent, high-net-worth couples, however, a divorce has the potential to be much more complex, especially when these individuals jointly own businesses, real estate and stock, and other assets. They may have signed pre- or postnuptial agreements that affect the character and divisibility of those assets.
They also may have alternative forms of income such as executive compensation packages, trust funds, or oil and gas royalties to consider. And all of this is before we talk about the more common divorce topics, such as child custody and support.
The following is a shortlist of the things we tell our clients who may find themselves in this situation.
Plan Now
It is always possible that spouses will be able to overcome their differences and choose to stay together. Struggling marriages are saved every day. But as the saying goes, hope for the best, plan for the worst. A divorce will change your life in ways you may not be anticipating. It can be hard and stressful. And one thing that will exacerbate that process is being unprepared. If you believe you and your spouse are headed for divorce, consult an attorney. Ask them about the divorce process and how it will affect your assets. Getting answers to these questions now will save you a lot of time and stress in the future.
Don’t Hide Your Assets
One of the first steps in any divorce will be to compile a list of assets. This establishes what you own and, potentially, what may be divided. Texas is a community property state, which means property acquired during the marriage is jointly owned by both spouses and must be distributed in a “just and right” manner. Knowing this is a catalyst for some individuals to attempt to hide assets from their spouse, sometimes going to great lengths to do so. If this is an idea that has ever occurred to you, we’re here to say, “do not do it.” Aside from being dishonest, its discovery can weigh heavily against you during property division, as well as other possible consequences from a court.
Power Through
A divorce involving high-net-worth individuals typically lasts longer because of the assets involved. Since the divorce process can be stressful, you may be tempted to settle quickly just to put the whole thing behind you. In our opinion, that is almost always a mistake. It may be difficult, but a little patience can go a long way. Remember, your financial future is worth fighting for.
Consult an Accountant
You may remember the now infamous marketing stunt in which Oprah Winfrey gave each member of her show’s studio audience a “free” Pontiac G6. Those individuals, who were quite excited at the time, were very disappointed to learn they were responsible for the thousands of dollars in taxes that Oprah wouldn’t be covering. There’s a similar lesson to be learned here. Because there are many different tax consequences associated with a divorce, it is highly advisable to consult with an accountant. While an experienced divorce attorney will be the one handling your divorce, negotiating with your spouse’s attorney, and making sure all the legal requirements are met, an accountant will be able to dig deeper into your finances and provide valuable insight into how ownership of these assets could affect you.
Listen to the Court
This may seem obvious, but many fail to understand the damage that can be done to a case by not following the court’s orders. It comes as no surprise that courts frown on obstructive and malicious behavior. This means a spouse should pay child and spousal support on time, follow injunctions, and various other orders. Following strict instruction may not come naturally to some, but it’s better to listen and comply than to do something that has the potential to mortally wound your case.
This is by no means an exhaustive list. After all, everyone’s situation is different. And while divorce involving large assets often takes longer to finalize, it’s very possible for the process to go smoothly and without acrimony. Regardless of your situation, be smart. Gather as much information as you can, work together with your attorney, and put together a plan that works for you.
