Small and large marital estates are governed by the same body of law under the Divorce Act. Specifically, in Indiana we follow the “one-marital pot” where property owned by either spouse before the marriage, acquired by either spouse in his or own right during the marriage, or acquired by joint effort is subject to the court’s division. The presumption is an equal of 50/50 split.
The significant difference the family law attorney faces is identifying and valuing the marital assets. In most cases, you value the car, home(s), retirement accounts, and divide it up. This is not so with high asset divorces.
For instance, if one party owns an interest in a closely-held business, it may be that upon a divorce filing, there is a mandatory corporate bylaw or term that requires the employee and/or owner of the corporation repurchase the stock for a fixed price; that is its value and the marital asset. This is because the company does not want a disgruntled ex-spouse obtaining the stock and interfering with the business. The divorce court has no jurisdiction over the business itself, only the shares of stock or the value if there is a mandatory sale upon divorce. In most cases, the value of this marital asset is the amount the company pays to reacquire the stock.
Another challenge for the divorce lawyer is valuing the family business. It may be that the business has little good will value but its continuing as an on-going endeavor is the reality of the situation. Good will is essentially the intrinsic value of a business that can be attributed to the name, the services it provides, and a number of other valuable items that cannot be indexed to any given person. This is where a forensic account and business valuator come into play to help fairly value this type of marital assets. There may be many different companies to discover and conduct such analysis.
A final area of high assets divorces that cause attorneys and other professionals a great deal of stress in assessing a proper value is where the business is a cash business, tax returns have not been filed, or the accounting records are facially apparent to be inaccurate.
The definition of a high net worth individual can vary, but typically it refers to an individual with $1 million or more in liquid assets. However, the issues that complicate high net worth divorces can be present in divorces between individuals with less money than this, one does not have to “feel” well-off to be affected by certain realities. A few issues that can arise in high net worth divorces include:
- Dividing multiple retirement accounts and life insurance policies
- Valuing & dividing an investment portfolio
- Managing, valuing & dividing real estate properties
- Determining the couple’s quality of life during the marriage and making determinations about child support and spousal support with this consideration in mind
- Valuing business interests and professional partnership
At Gasparis & Zembillas, Attorneys At Law, we have handled marital estate divorces. We have handled numerous high-assets divorce with a multitude of valuation challenges. When faced with a divorce that is complex because of the number of assets, bank account, and properties, then you need to choose the right counsel.
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