When executives, entrepreneurs, and other high net worth individuals divorce, their matters require more attention and experience than typical divorce cases because of the added complexity. Their attorney must thoroughly understand and present issues surrounding the valuation of a business, complex alternative investments, multiple trusts, overseas accounts and holdings, real estate holdings outside of the primary family home, tax consequences, and prenuptial and postnuptial agreements. Most executive and entrepreneur divorces will have complex histories and documentation requirements beyond those in most dissolutions. In executive divorces, outcomes can have far greater impacts on quality of life and the distribution of assets and support.
Attorneys at Freed Marcroft have experience in complex commercial litigation and estate planning, which puts them in a unique position to help Freed Marcroft’s divorce clients resolve complicated financial issues.
Alternatives to Litigation
Executive divorces can quickly become contentious due to the “high stakes” involved. Presenting your spouse with alternatives to litigation such as collaborative law and mediation should be an early consideration. High net worth clients often want to avoid or decrease the opportunity for a spouse to become combative, engaged in heavy litigation, lengthy and intense discovery, and bad faith negotiations. In addition, it is often a priority to keep their personal or business affairs out of the press. Taking a mediated or collaborative approach early on may avoid not only litigation but also public attention and scrutiny.
Building a Financial Picture
To maximize results, start early with your attorney to identify your team, especially in regards to appraisers and valuation experts, accountants, and divorce financial planners. If required, orders can be obtained to prevent asset liquidations not in your interest and/or to protect cash flows from a business and its continued operation. High net worth divorces require a high level of financial planning and scenario building.
Consider the possible issues you may face:
- Business Valuation and Professional Practices: Determining the value of a business can prove problematic especially if one spouse is an owner while the other is not. Valuation methods vary by business type and can be asset-based, income-based, or market-comparables-based. To maximize results your attorney and business appraiser should be in agreement on strategy and valuation method and how goodwill is applied.
- Hard to value assets such as copyrights, trademarks, patents, and other intellectual property.
- Tax consequences: Significant differences may be found with different property divisions and alimony awards.
- Wide ranging and complex fact sets: multiple businesses, personal property such as art, antiques and other collections, partnership agreements, employment agreements, employee benefit plans, defined benefit plans, inheritances, and prenuptial agreements.
You can read additional articles and blog posts on the financial aspects of Divorce below:
- Understanding the Key Differences Between a Connecticut Legal Separation and a Divorce
- 6 Preemptive Strategies to Protect Your Business From Divorce
- Top Four Financial Benefits To Filing First For Divorce
- Cohabitation After Divorce: Living with a New Partner Can Impact Alimony
The attorneys at Freed Marcroft guide select clients through the legal aspects of divorce while remaining mindful of their overall wellness. To discuss our helping with your situation, contact us either here or by phone at 860-560-8160.