8 Concerns for People Facing a High Net Worth Divorce

If you own significant assets, generate substantial income, and are facing divorce, the following article could salvage a large portion of your net worth.

In divorce, the more you make, the more you have at stake. Unless you have an ironclad prenuptial agreement, up to 50% of any net worth accumulated during your marriage could belong to your spouse – and maybe more.
The following eight tips will help you understand how to protect yourself through the divorce process.

1. Use valuation specialists if necessary. If you own a business, your business could be an asset subject to division upon divorce. This means you will have to determine the value, which likely includes the blood, sweat, and tears (aka goodwill) you’ve poured into it over time. Never enter into settlement negotiations for divorce without first knowing the actual value of assets like a business, professional practice or real estate.

2. Consider a forensic accountant. In many cases, spouses comingle funds or assets, which can give those assets a mixed characterization and make pinpointing the source difficult. Using a forensic account to trace funds and assets may be necessary.

3. Evaluate the strength of your prenuptial or postnuptial agreement. If you plan to handle your divorce as outlined in a prenuptial agreement, be sure it is well-drafted. If you’ve failed to disclose any assets or failed to have your prenuptial agreement executed under the proper conditions, your prenuptial agreement could be invalidated along with its terms.

4. Consider the tax consequences of your divorce. Transferring assets by way of divorce almost always involves significant tax consequences for high net worth individuals. Your divorce attorney should collaborate with your accountant to ensure any asset transfers as a result of your divorce are structured to mitigate as much tax liability as possible.

5. Understand your potential alimony obligation. If you generate substantially more income than your spouse, and your spouse needs financial support, you could end up with a significant alimony obligation. Alimony payments have tax implications for both the receiving and paying spouse so you want to be sure you can negotiation an alimony agreement that will be favorable to your overall financial picture.

6. Understand the implications of marital waste. Since your marriage has been on the rocks, is your spouse suddenly spending more? Is your spouse funneling marital assets into accounts for which you don’t have access?

It is not uncommon for high net worth individuals to experience this type of behavior from their spouse, or even be tempted to do the same. Thankfully, the law doesn’t allow the waste of marital resources to go unaccounted for, and with the proper guidance of a family law attorney you can take appropriate steps to prevent the unnecessary loss of assets and income.

7. Consider the cost of attorney’s fees (for you and your spouse). If your spouse has little to no income, and your income is substantial, you can expect to pay some amount of their attorney’s fees if you are the spouse seeking the divorce. Treat your divorce like a business decision. Plan how much you are willing to spend to get a reasonable divorce settlement and stick to that decision. Your net worth will thank you.

8. Calculate the cost of your divorce. Would you spend $20 on a $21 dispute? Of course not. Know the value of your fight. Do you want to spend tens of thousands of dollar (or more) on a dispute you could settle for the same amount? You’ll end up spending double what you’d pay, just to fight over the value. While it may be difficult to put your emotions aside and compromise, considering settlement could save you tens of thousands of dollars.

To learn more about how you can reduce the risk of diminishing your net worth as a result of divorce, click here to request a consultation or call 407-872-3161 to speak with one of our Orlando Divorce Attorneys today.

Attention Florida Business Owners Facing Divorce

If you are a business owner, and you are considering divorce, read this first.

Under to Florida Statute 61.075, property owned by you and your spouse falls in one of two categories: marital or nonmarital.

Specifically, marital property typically includes:

  • Assets and liabilities accrued during your marriage, whether accrued individually or jointly.
  • The enhancement of value and appreciation of nonmarital assets as a result of either spouse during the marriage or from the investment of marital funds or other forms of marital assets, or both.
  • Gifts given between spouses during the marriage.
  • All vested and nonvested benefits, rights, and funds earned during the marriage in retirement, pension, profit-sharing, annuity, deferred compensation, and insurance plans and programs.
  • All real property held by spouses as tenants by the entireties, whether acquired before or during the marriage is considered a marital asset.
  • All personal property titled jointly by spouses as tenants by the entireties, whether acquired before or during the marriage, is considered a marital asset.

The Statute also states that nonmarital property includes:

  • Assets and liabilities accrued by either spouse before the marriage, along with assets and liabilities accrued in exchange for those assets and liabilities.
  • Assets acquired separately by either spouse by gift (not between spouses or to the spouses as a couple, but as individuals), bequest, devise, or descent, and assets accrued in exchange for those assets.
  • All income earned from nonmarital assets during the marriage unless the income was treated, used, or relied upon by the spouses as a marital asset.
  • Assets and liabilities excluded from marital assets and liabilities by valid written agreement of the spouses, and assets or liabilities accrued in exchange for those assets and liabilities.
  • Any liability incurred by forgery or unauthorized signature of one spouse signing the name of the other spouse. That liability shall be a nonmarital liability of the spouse committing the forgery or having attached the unauthorized signature alone.

So what does that mean if you start or acquire a business while married?

Does your spouse have an interest?

What if you owned the business before you got married, does your spouse have an interest then?

The answer could be yes in all cases.

Let us explain.

As the factors outlined above suggest, if you started your business during your marriage, your spouse could have a marital interest in your business because all assets and liabilities accrued during your marriage are usually deemed marital.

But, your spouse could also have an interest in your business if your nonmarital business asset was converted into a marital interest because funds (or some other asset) earned by either spouse during the marriage was used to enhance or increase the value of the business.

Essentially, if you own a business and your wife contributed to the growth of your business financially or enhanced the value of the business in some other way, she could have an interest in your business upon divorce.

Determining whether or not a nonmarital business asset has become a marital asset requires a detailed and expert legal analysis. In fact, an experienced family law attorney should recruit the expertise of a business valuation expert or CPA to determine the value of the business for the purpose of divorce.

If you’re not sure where you stand, seek quality legal counsel to provide you guidance.

To learn more about whether or not your spouse could have a marital interest in your business, click here to request a consultation or call 407-872-3161 to speak with one of our Orlando Divorce Attorneys today.

 

How do I Protect My Assets in a Divorce?

Divorce requires a division of assets acquired during the marriage, so you can’t keep every asset you own out of your spouse’s hands. Knowing that, is there any way to protect your assets in Divorce?

Obtain a Prenuptial Agreement

A prenuptial agreement is an agreement between future spouses that sets forth the rights and obligations of each spouse upon divorce, death, and even during the marriage. In your prenuptial agreement make sure you designate your business as non-marital property. If you’re currently married, you may be able to achieve the same result by obtaining a post-nuptial agreement.

A postnuptial agreement is an agreement drafted after marriage but serves the same purpose as a prenuptial agreement. Having said that, if you’re currently contemplating divorce, a postnuptial agreement will likely not be very useful to you. Once a divorce is imminent a postnuptial agreement becomes a separation agreement, which doesn’t mean you’re business will be protected.

Prenuptial and postnuptial agreements are very specific documents that require experienced legal insight when drafting. Simply missing one essential element in drafting and executing a prenuptial or postnuptial agreement can render the entire thing void – and for you useless.

Consider a claim for an unequal distribution

Florida is an equitable distribution state which, based on some factors requires spouses to divide their assets “fairly.”

However, where one spouse rightly deserves total ownership of a business that is subject to division in divorce, the court must consider whether it is actually more equitable to allow one spouse to retain a “business, corporation, or professional practice, intact and free from any claim or interference by the other [spouse].”

If your business is at risk in your divorce, this could be one way to protect it. Be sure to speak with an experienced family law attorney to determine whether or not unequal distribution applies to your case.

Reconcile with Your Spouse

Now, don’t get this wrong. We are not suggesting you stay married just to protect your business. But maybe the challenges you’re facing as a result of your prospective divorce can serve as a catalyst for evaluating whether or not you want to sever the very things you and your spouse have built together?

Perhaps your marriage is salvageable?

Perhaps with the right help it could thrive?

Reconciliation isn’t always an option, but you should be sure it isn’t before you pursue the path of divorce. As strange as it that sounds coming from divorce lawyers – take our word for it.

To learn more about how you can protect your business if you’re facing divorce, click here to request a consultation or call 407-872-3161 to speak with one of our Orlando Divorce Attorneys today.

Does it Matter if My spouse had an Affair in a Florida Divorce?

Most states are “no-fault” divorce states. This traditional grounds (or reasons) like adultery, cruelty, or abandonment are not required to obtain a divorce. Simply state your reason for divorce and the court will accept it.

That doesn’t mean, however that bad behavior is without consideration in your divorce.

Under Florida’s Equitable Distribution Statute 61.075, any “marital waste” suffered as a result of your spouse’s behavior (after or within 2 years prior to filing for divorce) can be considered in the distribution of assets in your divorce.

For example, if your spouse spent extreme amounts of money gambling, on drug use, or extramarital affairs a court could consider these facts in distributing your assets and liabilities for the purposes of equitable distribution.

In extreme cases, proven marital waste could lead a judge to order an unequal equitable distribution (meaning you get more than your fair share of distribution). However, you must request unequal distribution based on marital waste to receive it.

So, yes. In some cases, your spouse’s extramarital affair or the waste of marital assets could impact the outcome of your divorce.

For more on how marital waste can impact your divorce and divorce settlement, click here to download our free guide How to Avoid an Unfair Divorce Settlement.

Whether you’re facing a challenging divorce trial or expect a quick divorce settlement, working with an experienced divorce attorney who understands the intricacies of family law is vital to obtain the most favorable outcome possible in divorce.

To determine whether or not your divorce case involves a valid claim for marital waste, click here to request a consultation or call 407-872-3161 to speak with one of our Orlando Divorce Attorneys today.

How Much Alimony Can I Receive From My Divorce?

Alimony is one of the most hotly contested issues in a divorce.

Some cases can carry on for years because spouses cannot agree on alimony.

Under Florida Statute 61.08, the amount of Alimony you can receive from your divorce depends on several factors starting with:

  1. Need: First, the court must determine whether or not you or your spouse needs spousal support (aka – alimony).
  2. Ability: Second, the court must determine whether or not you or your spouse has the actual ability to pay spousal support.

Once the court has found need for alimony by one spouse and an ability to by that alimony in the other spouse, then the court must consider all relevant factors to determine exactly how much alimony should be paid.

Generally, the court considers approximately ten key factors in assessing how much alimony should be paid from one spouse to the other, which are listed in Florida’s alimony statute 61.08.

Most Common Types of Alimony Received in Florida Divorces

There are also five different types of alimony which will impact the total amount of alimony you may receive.

The five types of alimony include:

  1. Permanent Periodic: This is alimony paid to a spouse until that spouse remarries, or until the paying spouse dies. This type of alimony is usually only available in cases of long-term marriage.

 

  1. Durational: This is alimony paid to a spouse for a short or moderate period of time. As such, this is the type of alimony awarded to spouses of short-term or moderate-term marriages. The only limitation to durational alimony is that you cannot receive durational alimony for a period of time longer than your marriage itself.

 

  1. Bridge-the-Gap: This is alimony paid to a spouse to help them “bridge-the-gap” between married and single living. Usually, this type of alimony is only paid for a short period of time.

 

  1. Lump Sum: This is alimony paid to a spouse in installments. Sometimes spouses agree to make a one-time lump sum payment of alimony, other times spouses choose to make installment payments over a specific period of time. In either case, lump sum alimony cannot be modified at any time.

 

  1. Rehabilitative: This is alimony paid to a spouse for the purposes of helping the receiving spouse become self-sufficient by developing new skills, obtaining an education, or work experience. The receiving spouse must demonstrate a plan for becoming self-sufficient, and this type of alimony is generally short in duration.

As you can see, the length of your marriage also impacts how much alimony you’re eligible to receive. Usually, the longer you’re married, the longer you are entitled to receive alimony. Florida statue 61.08 outlines what constitutes a short-term vs. moderate-term vs. long-term marriage.

You Can Agree to Any Type of Alimony

You can also negotiate alimony beyond, or different from the statutory guidelines if you and your spouse agree to different terms through a settlement conference or divorce mediation.

In Central Florida, you may also request Temporary alimony immediately after attending mediation if you and your spouse fail to come to an agreement. Temporary alimony allows you to obtain court ordered spousal support while your divorce is in progress, and you’re waiting for a final determination on your alimony issue.

Remember, obtaining alimony in divorce is not automatic. You must ask for alimony in your divorce petition or divorce counter-petition to be awarded alimony by the court. Failure to ask for alimony could result in you waiving any ability to get alimony after your divorce is finalized.

Alimony involves several complicated tax, income, and even child support issues, so it’s important to discuss your options with an experienced divorce attorney who can provide you with guidance in this area.

To learn more about how much alimony you may receive in your Orlando divorce case click here to request a consultation or call 407-872-3161 to speak with someone from our team today.

Will I have to pay Alimony if I get Divorced in Florida?

One of the more common questions we receive from clients is:

“Will I have to pay alimony if I get divorced?”

Unfortunately, that question is not easily answered. Having to pay alimony in Florida depends on several factors unique to your personal divorce case.

To help you understand how alimony works in most Florida divorce cases, let’s cover some basic alimony principles you should know.

What is Alimony?

Alimony, also known as spousal support, is financial support ordered by the court and paid to your spouse.

For a spouse to receive alimony they must be able to demonstrate that they have a need for financial support and that the other spouse can pay them.

It is important to note that a spouse who wants alimony must request alimony in their divorce petition or divorce counter-petition. If they fail to ask the court to order alimony in their petition, it cannot be granted by a Judge at all.

In other words, if your spouse does not ask for alimony they cannot automatically get it.

Finding a “Need For” and an “Ability to Pay”

Florida Statute 61.08 subsection (2) says:

“In determining whether to award alimony or maintenance, the court shall first make a specific factual determination as to whether either party has an actual need for alimony or maintenance and whether either party has the ability to pay alimony or maintenance.”

This means the Judge will have to find evidence that supports the requesting spouse’s claim that they have a need for financial support. It also means the Judge will have to find evidence that supports the paying spouse can afford to make alimony payments.

Usually, your income is the first guideline used in this determination. If you make substantially more than your spouse, or if your spouse is a homemaker or otherwise unemployed, a court could determine that the difference in income between you and your spouse calls for some form of spousal support for the spouse in need.

Once a court has determined that the spouse requesting alimony has proven that they need alimony, and that the paying spouse has the money to provide the support requested, the Judge then has to determine the proper type and amount of alimony to order.

How Much Alimony Will I Have to Pay

To determine the proper type and amount of alimony to order, Florida Statute 61.08, outlines ten factors the Judge must consider.

Some of these factors include:

  • The standard of living during the marriage
  • The length of the marriage
  • The age, physical, and emotional condition of each spouse
  • The financial resources of each spouse (including all income and assets)
  • The earning capacities, educational levels, and ability to obtain employment
  • The contribution of each spouse to the marriage, which include homemaking, child rearing, education and career building of the other spouse
  • The adultery of either spouse and the surrounding circumstances

There are several other factors in addition to those listed above, so it is important to speak with an experienced divorce attorney about your specific situation, so you understand how alimony impacts you personally.

Once the Judge determines the appropriate amount and type of alimony to award in your case, the Judge can then order you to pay that amount and type of alimony to your spouse.

The good news is that Florida’s Alimony Statute requires an award of alimony to one spouse does not leave the paying spouse with significantly less net income than the spouse receiving alimony (although there may be exceptions).

Ultimately, while it never feels fair, this is the court’s way of ensuring an award of alimony doesn’t financially cripple the paying spouse.

When Will I Start Paying Alimony

Unless your spouse has requested and been awarded temporary alimony. Your alimony payments should begin on a date as ordered by the Judge. Usually, this date is shortly after your divorce is finalized.

However, if your spouse has requested and is awarded temporary alimony before your divorce is final, you will need to begin payments as ordered by the Judge in your case.

To learn more about whether or not alimony applies to your Orlando divorce case click here to request a consultation or call 407-872-3161 to speak with someone from our team today.

Family Law and the Golden Rule of treating Family Law Clients

By Family Law Attorney Tom Marks

I have been practicing family law in Orlando for about 27 years now and I continue to be amazed at how poorly some lawyers treat their clients. These types of divorce attorneys tend to treat their clients as a “one time transaction.”

This has many adverse consequences for the client as well as the attorney. The clients’ overall long-term best interests are often overlooked and as a result, should the client need further help in the future, they do not return to the attorney that treated them like a “one time transaction.”

Family law attorneys that practice the “Golden Rule” put themselves in their clients’ shoes and ask the question, “If I were the client how would I want to be treated?” So no matter whether it is a financial case, involving Alimony, Equitable Distribution, Child Support or Attorneys’ Fees, or if it is a case involving minor children’s issues like Time Sharing, Right of First Refusal and Shared Parental Responsibility, the attorney needs to employ empathy and consider how they would want to be treated if they were the client.

The attorney who puts the client first rather than the financial demands of the law firm will reap the benefits of having highly satisfied clients who will readily recommend them as a family law attorney to their friends and anyone else they come in contact with. The attorney will also benefit from an improved reputation, greater satisfaction in his or her work and having a sense of purpose and value in his life.

At The Marks Law Firm we treat our clients as eternally meaningful human beings and that we have been placed here to serve in such a way that they are actually better off at the end of their case then when they first showed up at our door. We do our absolute best to communicate clearly, represent zealously, seek best case solutions and to improve our client’s situation by offering hope and a future to them at the end of our representation. We enjoy building friendships and relationships that will last a lifetime and beyond.

The Crucible of Family Law

by Family Law Attorney Tom Marks

I just finished reading an interesting book entitled “Leadership in the Crucible of Work” by Sandy Shugart. A crucible is essentially a hardened ceramic vessel in which chemical reactions take place under great heat and pressure. The author applied that concept to the heat and pressure many of us feel in the work environment.

I would like to take that one step further into the realm of family law and when our clients find themselves in the crucible of family law.

Take all of the hopes and dreams of a marriage with children, the family home, incomes, bank and retirement accounts and all the debt looming over everything and then pour all that into the crucible we call a dissolution of marriage.

The financial, communication and other relational issues that have brought the marriage to this place are now poured into a petition for dissolution of marriage and put under great heat, pressure and reactivity.

Financial pressure of the marriage is heightened because now the parties cannot live as well financially in two separate households as well as they did in one. They cannot communicate as well separately as they might have when they were together and they are further estranged from one another as they move further and further apart, geographically, emotionally, psychologically and spiritually.

However, sometimes under great pressure people can rise to the top and produce something even stronger than before. Like melting iron and copper together in the crucible to form bronze, some people grow stronger and more resilient through this difficult process we call divorce.

Sometimes it is necessary because of abuse, abandonment and infidelity. That is not to say divorce is always the answer. It is certainly not. But sometimes its result is something stronger, more focused and more resilient.

How to be a Great Family Law Client

Meeting with and hiring an attorney can be a scary and difficult process. Most people (thankfully) don’t have much experience with lawyers and legal issues, and your first experience can be intimidating.

Taking these things to heart will make your lawyer’s job easier and will enhance your overall experience with the legal system.

  • Maintain Reasonable Expectations: Despite what you hear on some commercials or in the movies, your attorney is not able to leap tall buildings in a single bound!
  • Remember that your lawyer can only operate within the law in your State, and is constrained by that law and the Court in which you find yourself. Also, always keep in mind that each case is fact specific. There’s nothing more frustrating for a lawyer than having to explain why the outcome of your cousin’s neighbor’s sister’s friend’s case doesn’t apply to your situation. Let your attorney help set your expectations based on their knowledge and experience, and trust them when they give you the range of possible resolutions.
  • Keep an Open Line of Communication: When it comes to the facts of your situation, your attorney only knows what you tell him or her. Make sure that you’re communicating regularly and keeping your attorney apprised of any incidents or exchanges that might be relevant to your case. Sticking your head in the sand will only hurt your case and make it harder for your attorney to protect you.
  • Always Be Honest: Similar to keeping an open line of communication, your attorney will be able to most effectively protect you if you tell the truth. Don’t withhold information from your attorney and don’t try to strategically keep secrets from him. When in doubt, always err on the side of telling your attorney something rather than keeping it to yourself. If we know all relevant facts, we can prepare for and address them. If not, we can’t provide you with complete counsel and you’re likely to suffer as a result.
  • Be Organized: Make sure that you keep emails, invoices, and other documents that might be related to your case. Send copies to your attorney regularly as well. Family law cases can involve a lot of “he said/she said” and the Court appreciates when there is documentary evidence to support your position. It also makes the attorney’s presentation a lot easier and more compelling.
  • Accept Counsel’s Advice: Your attorney has been through a good amount of school and training to get to where she is. Trust that she is looking out for your best interests and providing appropriate counsel. Family law cases can be difficult and emotional, but you shouldn’t make emotional decisions. Instead, follow your attorney’s lead and trust her counsel. If you can’t do that, it’s a sign you may need a new attorney!

While this list isn’t exhaustive, following these guidelines will help your attorney do his best job and will make your experience with the legal system go much more smoothly. Family law litigation may not be fun, but by working with your attorney as a team you can help minimize the pain and get a fair result more quickly.

Family Law and Attorney Leadership

By Family Law Attorney Tom Marks

I read a great book while on vacation last week on the topic of leadership. You might ask what does leadership have to do with a family law practice. Don’t family law attorneys just deal with divorce, timesharing, children’s issues, equitable distribution, alimony and the like?

Well actually, good family law attorneys are all about leadership. If the divorce attorney is open to new ideas and ways of helping others, then he or she is able to influence, teach and mentor others in the process. When the client arrives in an emotionally and financially vulnerable place, the attorney can exercise integrity and leadership to help the client navigate through the divorce, modification, enforcement or other any other type of family law case.

Good family law attorneys, as leaders, need to have a vision and be able to communicate that to the client. They also need to have good communication skills and to be highly competent in their profession. Great leaders, who happen to be family law attorneys, need to have great people skills and be able to coach their clients through a very difficult process. They need to be open to doing what is in the best interest of the client, even if that means helping them reconcile their marriage and keep their family together. That is called integrity.

I have read a lot of books on leadership and have always tried to exercise the principles I’ve learned not only in my personal and family life but also in my professional life as a family law attorney.