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.

Who Is at Fault When Nobody’s to Blame?

One of the questions asked most during initial consultations is: “Does my spouse’s infidelity matter?”  It’s a fair question, given the pain infidelity can cause.  While televisions shows like “Jerry Springer” and “Cheaters” make light of spouses who don’t honor their vows, for the cheater’s other half the issue isn’t funny and demands attention.

Without a doubt, the party who has been “cheated on” has every right to be hurt or even angry, and the desire to see the cheating spouse held accountable is understandable.  The same goes for parties who have been victimized by emotional affairs, disengaged spouses, or a just plain “bad marriage.”

Infidelity Irrelevant in Orlando?

However, Florida’s divorce laws render a spouse’s infidelity, and the other reasons marriages fall apart, largely irrelevant in a divorce proceeding.  That’s because Florida is a “no fault” divorce state, which means the reason behind the failure of your marriage is of little importance to the Court.  The Court will ask only if your marriage is “irretrievably broken,” and if either party wants a divorce, that desire is enough to “break” the marriage for legal purposes.

The Court generally does not make judgments about the health of your marriage or whether divorce is right for you, and it almost never engages in a discussion about whether counseling or other steps might save your marriage.  Unfortunately, in Florida, if one spouse “wants out” of a marriage, there is little the other spouse can do, through the legal system, to stop them.  Many people (including yours truly) believe we have made it too easy for people to end their marriage, but that is the current state of Florida’s law.

I write the above not to discourage anyone, or steal hope from a spouse holding on in a difficult situation.  It’s actually quite the opposite.  My hope in explaining Florida’s “no fault” divorce laws is to encourage those in struggling marriages to get help before considering legal options.  Unless you are in an abusive situation or have been abandoned without the means to support yourself and/or your children, I urge you to explore non-legal ways to address your marital issues.

Seek out the counsel of trusted clergy or a professional counselor.  Consider programs like the “Fireproof” or “Courageous” studies to see if they might be useful.  Enlist friends and relatives to help you communicate with your spouse about your desire and commitment to salvage your marriage and keep you family together.

Whatever you do, don’t give up on your marriage and family just because the road gets rough. Divorce is too important a decision to make lightly, and it’s too difficult a process to endure as anything other than a last resort.  If you need help figuring out the right thing to do in your situation, please contact one of the family law professionals at The Marks Law Firm so we can talk about what you can do to preserve your family and protect your marriage.

“MIRRORING” – and Its Application in the Law

By Family Law Mediator and Attorney Ronald L. Sims

Psychologists have a time-honored vehicle to enhance communication. It’s called “mirroring.”

The procedure is simple in theory, but may be slightly difficult in application.

The first speaker makes a statement, and the second speaker “mirrors” that statement by repeating it verbatim. Sounds easy enough.

Let’s try it.

                        First speaker: “I’m uncomfortable with you here.”

                        Second speaker: “You don’t want me here.”

                        (Buzzer)

As often happens, the second speaker doesn’t repeat, but instead re-interprets what the first speaker said. That is not mirroring. Let’s try it again.

                        First speaker: “I’m uncomfortable with you here”.

                        Second speaker: “you said, I’m uncomfortable with you here”

                        (bell)

The first speaker relaxes- he or she has been heard and understood, and that is important. All too often we hear what is said to us, and we quickly re-interpret what is said and end up with a conclusion that is slightly off, if not flat out wrong.

There have been many occasions when lawyers have agreed to something over the phone, only to end up in a later fight about what was actually said. That result is often avoided by exchanging confirmation messages, so that both parties know and have a memorial of exactly what was intended. That is a form of mirroring and, as many can tell you, it has often saved the day from protracted litigation over an issue that both parties thought was resolved.

How many times in marriage, or post-marriage, do we hear, “You said_______”, “No, I didn’t.” Such a situation often is followed by a heated discussion that usually results in a deadlock (or sometimes a hammerlock).

With the advent of email and texting, the concept of mirroring can take place in a matter of seconds. If, however, you think the matter may have some significance later on, and you are in a position to do so, write it down, date it, and have the other party initial it. If the circumstances won’t allow for that, at least you can write some confirmation note that you can share with the other person in a timely manner to at least memorialize your understanding of the matter. Then, if they don’t correct it, you have evidence of a mutual understanding.

This may sound like I’m suggesting something awfully technical. I’m not! Misunderstandings occur all the time, and normally are unintentional. Eliminating those misunderstandings by mirroring your correspondent is easy, painless, and many times, very important. Attorneys often refer to a “he said/she said” type of case. Those instances can be avoided at home, as well as in the courtroom which will lead to clear communication and fewer headaches for everyone involved!

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.

Be Better Than Unselfish!

In this age of moral relativism, where “tolerance” is the watchword of the day, taking a strong stand has become taboo.

But one of the few virtues most people remain willing to endorse (verbally at least!) is unselfishness. If you told Jay Leno’s “man on the street” that he should live a selfless life, he would almost certainly agree. And you and I probably would agree as well. Unselfishness is noble, and the selfless life desirable. But my question is this: “Is unselfishness enough?”

In his book “The Weight of Glory,” philosopher and theologian C.S. Lewis addresses this question and concludes that we can do better. According to Lewis, the ideal of a selfless life focuses “not primarily on securing good things for others, but on going without them ourselves, as if our abstinence and not their happiness was the important point.” Lewis suggests, and I agree, that love should replace simple unselfishness as our goal.

A fair question right about now would be “What’s the difference?” Glad you asked! Love is a positive that serves the recipient; unselfishness, alone, has no recipient. Love gives; unselfishness gives up. Instead of celebrating our lacking, let’s seek out ways to bless those around us. Rather than denying ourselves for the sake of self-denial, let us turn our energy toward meeting the needs around us. Imagine the beauty of substituting the affirmative act of loving those around us for the negative non-act of simply going without ourselves!

To be fair, loving others starts with putting their needs ahead of yours, which requires a selfless approach. But the attitude (unselfishness) only has an impact on others when followed by the action (love). A selfless mindset only gets us halfway home; the next necessary step is to love. It’s then we learn that not only is it better to give than to receive, it’s also better to give than to simply give up! God bless and have a great week!