Choosing a Divorce Attorney in High Asset Value Situations

By | April 9, 2018

What to consider, where to look, and what you should expect

In a divorce involving business, real estate, intellectual property, stock
options, or complex f nancial assets, the attorney must have extensive
business background and experience. If he or she doesn’t, your likelihood
of success is limited. If the attorney has not been involved in
business formation, operation, sale and f nancing, it is dif cult for
the attorney to understand the f ne points necessary to establish the
value of the business.

Choosing a Divorce Attorney in High Asset Value Situations

Therefore, the inexperienced attorney has no choice but to rely upon
expensive experts, paid for by the client. This creates problems not
only due to the costs involved, but because the attorney is now dependent
upon the expert’s opinion. It is rare for a divorce attorney
to have an extensive business and real estate background or handson
experience that allows the attorney to completely understand the
complex f nancial issues involved.

Typically, divorce attorneys are so specialized in family law that they
do not have the broad background in business necessary for high asset
value divorces.

The Critical First Step:

Pre-divorce planning and document review is a must. You can’t build
a house without a proper set of plans, nor can you properly conduct a
divorce without complete and accurate f nancial information.

The easiest and least costly way of going through the divorce process
is to have complete f nancial information available to your attorney at
the beginning of his representation. He should assist you in completing
a questionnaire.

Don’t be concerned if you do not have all of the information. It is
usually available through your accountants, bookkeepers, or other
professionals involved with your business or real estate.

The attorney should be skilled at identifying and acquiring the information
necessary for asset valuation. Documents and f nancial information
are the critical foundation for planning your divorce. The
experienced attorney will be able to do the divorce more ef ciently,
with less expense, and with a better result, with better information
produced as quickly as possible.

Additionally, in a pre-divorce planning session, the attorney should
be able, after receiving a reasonable amount of f nancial information,
to predict, within a range, the ultimate outcome of your case.

Your Divorce Balance Sheet:

Parties to a divorce are considered to be in a f duciary relationship.
This means that each party has the obligation to completely disclose
to the other all of their assets and liabilities. The initial Court forms
which you will complete as a part of your divorce process require
disclosure of assets and liabilities. This is where the benef t of predivorce
planning and document collection becomes clear.

There is nothing more frustrating, or loss cost ef ective, than facing
a constant change in asset values due to changes in asset information.
The experienced attorney will know where and how to obtain all
information and documents necessary to complete your divorce as
quickly and ef ciently as possible.

The Separate Property Rule:

Determining “separate” property is often one of the most dif cult
tasks involved in a high asset value divorce. It is incumbent upon the
attorney to determine what is “separate” property and what is “community”
property.

Absent a valid premarital agreement, the marital rights of parties are f xed
law. Generally, community property is divided equally.

Separate property is excluded from the community property and is
awarded to the owner. “Separate property interests” include property
owned before marriage, property acquired during marriage by
gift or inheritance and prof ts of such property, or property subject to
a valid premarital agreement.

Characterizing the status of property interest as “community” or
“separate” is the foundational starting point for the resolution of
marital property rights. The type of ownership of the assets, such as
joint or individual ownership, must be determined early in the case.
Issues concerning ref nancing of assets during the marriage and use
of the proceeds from the ref nancing must also be carefully considered.
Additionally, separate property can be subject to what is called
“transmutation”, which is a transaction or an agreement that results
in a change in the character of the property. By this process, seperate
property can become, in whole or part, community property. This
issue is confusing and complex, and your attorney must be experienced
in sorting out all the facts and legal issues involved.

 

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