High-net-worth individuals going through divorce are subject to the same legal proceedings as anyone else. But these divorces tend to be more complex and can be more contentious due to the nature and value of the assets involved. Issues of child support and alimony can also take on a different meaning. Experienced and knowledgeable legal representation is essential to ensure that your interests are protected. If you’re a high-net-worth individual, turn to Youngberg Law Firm for all of your divorce needs.
How Is Property Divided In Texas?
When married couples divorce, one of the most significant parts of the process is property and debt division. Understanding Texas property and debt division rules is therefore critical.
Texas is a community property state, which means that property acquired during the marriage is presumed to be the joint property of both spouses. Debts are generally subject to the same standard. For that reason, most property and debt acquired during the marriage, regardless of whose name is on the title, will be considered community property.
Separate property is property that is not part of the community estate and may include inheritances, gifts, certain types of personal injury awards or anything that either party owned before the marriage. A court dividing up property must first determine which assets and debts are separate and which are community. For high-net-worth worth individuals, this is an especially critical part of a divorce. If you have owned significant assets prior to marriage, you will want to ensure they are kept separate from the community estate.
Assets are not always easily classified as community or separate. A spouse may have owned a business before marriage, for example, which would normally make it separate. However, if the other spouse helped build the business or otherwise contributed to it during marriage, he or she may have a claim to a portion of it. Or a spouse may have brought a large sum of money into the marriage but put the money in a joint account used to pay community expenses.
These types of actions by a spouse can make it more difficult to prove which assets are community and which are separate. This can be particularly difficult to prove because the court will require that separate property be proven by “clear and convincing” evidence, which is a higher standard than the “preponderance of the evidence” standard generally used in family court.
What Special Property Division Challenges Are There For a High-Net-Worth Divorce?
High-net-worth individuals often own more complicated assets than those involved in a typical divorce, including:
- Complex real estate interests, such as timeshares, vacation homes, and properties outside of Texas
- Ownership or interest in a business, including a publicly-traded company or family business
- Professional practices and partnerships
- Pensions, retirement benefits, and severance packages
- Stock portfolios, bonds, and other investments
- Intellectual property
- Estates and trusts
- Foreign investments and holdings
- Artwork, boats, and other valuable collectibles
- Hidden assets
- Significant debts and liabilities
Assets that are categorized as community property also need to be valued. Complicated assets may require input from outside professionals to ensure accurate valuation. Among these professionals are financial planners, certified public accountants, and other experts who specialize in real estate, taxes, and more.
High-net-worth divorces also tend to involve claims by one spouse that assets are being hidden by the other. To uncover hidden assets, your family law attorney will need to conduct a process known as discovery. Discovery is used to learn important and relevant financial information and find out what sorts of arguments the other spouse may use in court. Common discovery tools used in high-net-worth divorce cases include:
- Interrogatories: written questions sent to the other spouse
- Requests for production of documents: used to obtain documents relevant to the case
- Requests for admission: the opposing party must admit or deny certain statements, a process used to narrow issues for trial
- Requests for disclosure: among other things, these are used to identify individuals with relevant information about the case and to learn the opposing spouse’s legal arguments
- Sworn inventory and appraisement: used to list the marital assets both sides know about, to assign them a value, and to specify whether the spouse believes each is community or separate
How Are Spousal Maintenance and Child Support Handled in a High-Net-Worth Divorce?
Property division is a major aspect of high-net-worth divorces, but it is by no means the only one. Spousal maintenance or spousal support and child support are also issues that must be addressed.
The purpose of spousal maintenance is to ensure that a spouse’s minimum reasonable needs are taken care of after a divorce. The purpose of child support is to make sure that the children’s needs are being met. With high-net-worth divorces, a spouse may claim that he or she needs far more support than is typically granted. And parents may say that their children’s needs justify more support than would typically be granted under the texas child support guidelines.
Spousal support can pose a challenge to either spouse in a high-net-worth divorce. Texas has clear rules that must be met in most cases before a spouse can obtain spousal support, such as marriage for at least 10 years. A spouse must also show that he or she needs support to meet his or her minimum reasonable needs. On the other hand, high-net-worth spouses often claim that they need far more than necessary to cover this amount. They may receive up to $5,000 per month in alimony, depending on the circumstances.
Texas uses a calculator to determine the reasonable amount of child support that should be paid. But this calculator only applies to individuals earning up to a certain amount (currently, $9,200 of net monthly income). Above this amount, the court will need to determine the proven needs of the child before it can assign a dollar amount. But this can be expensive for children who are used to high living expenses. While one parent may attempt to pay as little as possible, the other may exaggerate the child’s needs.
A Divorce Attorney You Can Count On
Having an experienced high-net-worth divorce attorney can make a significant difference in what each spouse will end up with, and the amount of spousal and child support that will be paid. Youngberg Law Firm is dedicated to ensuring our clients are fairly treated and receive the best possible results. Let us help with your family law case. Call us today for a consultation.