Divorce lawyers who handle high asset cases know that divorce cases, from the perspective of the higher income spouse, can cause stress and uncertainty. For the sake of this article, we will assume the higher income earner is the husband since that is still traditionally true in most high asset divorce matters.
Many times, the higher income earner is concerned whether or not his children will be used as leverage, whether child and spousal support will finally break him financially and how the significant assets accumulated during the marriage will be divided. Let’s look at these issues closer.
Regarding the children, the husband’s concern stems from his work schedule and commitments and knowledge that he doesn’t see the children as often as he would like. This leads to anxiety about future visitation schedules as well as the potential for parental alienation in a divorce by a bitter spouse.
Regarding child and spousal support in the high asset divorce case, the concern is simply affordability. It’s one thing to make a lot of money (for example, $1 million dollars per year), but the higher income brackets also get taxed heavily so the net income, after taxes, can be 50% or even less depending on the tax and financial structure. That and the significant financial obligations and debts that can accompany a high asset divorce can make a large support order unsustainable.
Regarding the assets, the concern can often be boiled down to a simple question – “will the asset portfolio we have built be ruined in the property division?”
We will address the children first.
High asset divorce cases and children – alienation and leverage
It shouldn’t happen but it does. Spouses do sometimes use children as leverage and as a means to exact revenge over their bitterness at the other spouse or to obtain a greater support amount. In the case of a high asset divorce, the children can be caught in the middle. Custody and time share are the most important factors in calculating child support. The amount of child support can directly impact the amount of spousal support, both on a temporary and long-term basis. How does the higher income earner, let’s say an executive going through a divorce, keep this from occurring or getting worse?
1. Spend quality time with the kids. Yes, it’s that simple. If you don’t make time to see your children, you will have a heck of a time convincing the court that, just because you are going through a divorce and facing a child support order, you should get more time. Fathers (or any working parent) must make their children a priority in their life if they intend to obtain frequent and continuous visitation with the kids during the divorce and after.
2. Document alienation. If you see your children acting out, telling you about harmful or hateful things the other parent has stated about you or you observe the other parent engaging in other acts of alienation, don’t ignore it. Before you are involved in a divorce proceeding, bring it to your spouse’s attention. If your spouse refuses to take corrective measures, consider whether child counseling is appropriate. Talk to your children about your love for them and reassure them – most of all, show it. Spending quality time with the kids goes a long way in helping them understand your love and commitment as a parent to their best interest. Keep a running log of the statements or acts that concern you as well as the corrective measures you have taken.
3. If the alienation does not stop or gets worse, talk to an experienced Orange County divorce lawyer about seeking a forensic child custody 730 evaluation during the divorce. These evaluations, called 730 evaluations because of Evidence Code 730, can flesh out alienation. The evaluator, who will likely be impressed by your proactive but caring measures, can report to the court your spouse’s alienation and make appropriate recommendations.
High asset divorce cases – the potential suffocating child and spousal support payments
High asset divorce cases often go hand in hand with high income numbers. But child support and spousal support doesn’t have to come with mind numbing support numbers that are beyond the reasonable means of the higher income earning spouse.
A controllable cash flow analysis is one of the most effective ways a spouse (in our hypothetical, the husband) can prepare for the support hearing. Rather than relying on computer programs that tell the court what the net income should be, a controllable cash flow analysis prepared by a forensic accountant will tell the court what the net income actually is. The analysis can also break down the family (and community) expenses so the court understands what the total obligations are and, when making a support order, has the discretion to make orders to ensure their prompt payment from the support. One example of this is a mortgage payment.
Husbands in high asset divorce cases are sometimes concerned about the wife (who lives with the children at the family residence) not making the mortgage payment but still collecting support. In such situations, the court has the discretion to order the mortgage payment be deducted from the support if the wife does not pay it or other orders to ensure the house does not go into default.
High asset divorce cases – protecting the assets
High asset divorce cases don’t have to result in everything being sold or liquidated. Good divorce lawyers in high asset cases look for options in such situations to create offsets and an award of property that keeps as much of the financial portfolio intact.
For example, with a business, a buyout is one of several options. The business does not necessarily have to be sold.
In the case of the family residence, sale is not the only way to go. If there are assets that can offset the one half of the community value in the residence, the spouse who wants the house can buy the other one out through that offsetting process.
Money in pensions, 401(k)s, IRAs, or other deferred compensation plans don’t have to be liquidated or borrowed against at a high penalty. Qualified domestic relations orders can be prepared that allows for one half of the community property portion to be rolled over to the non-investing spouse. In addition, the same method of offsets can be used to avoid such plans from even being touched.
High asset divorce cases and finding the right divorce lawyer
Before you file for divorce, make sure you have a plan. The best divorce lawyers in high asset divorce cases don’t just file and figure things out later. They discuss a plan with their higher income earning client and figure out a plan of action that keeps the divorce as amicable as possible and, if their spouse simply refuses to cooperate, put into motion actions that mitigate any harm to the children and the family’s financial structure.
Our lawyers are ready to consult with you. Contact us today and let’s get your case started on the right track.