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Is spousal support a contentious issue in high-asset divorces?

When the circumstances warrant it, Florida law supports an award of alimony, also called spousal maintenance. Yet spousal maintenance  can be a contentious issue in high-asset divorce cases. The calculation is also not as straightforward as child support, where state law provides statutory factors.

Although Florida law does not expressly establish minimum spousal maintenance awards, family law courts do consider several common factors in evaluating the reasonableness of a requested maintenance award. The length of the marriage and each party’s income earning potential are starting points. Other relevant factors may include each party’s age, health and education. The court will also evaluate the lifestyle to which the parties had grown accustomed to during their marriage.

In a recent example, a financial expert offered testimony in the divorce of Alicia Stephenson from Cancer Treatment Centers of America founder Richard Stephenson. The expert’s lifestyle analysis determined that the wife would require monthly support of over $430,000 to satisfy her living expenses. Those expenses would cover the upkeep of multiple homes, a private chef, pet care, entertainment and other costs.

The divorce has caught the attention of the media not only for the sizable monetary request at stake, but also the procedural twists: the couple signed a prenuptial agreement in 1991. However, the agreement allowed for spousal maintenance to be renegotiated in the event the marriage lasted more than seven years. Since that requirement was met, the couple has found themselves litigating the issue in court.

Our Florida divorce law firm has helped many clients negotiate the issue of spousal maintenance. Mediation can be a wise option if a couple desires to protect their privacy. However, money can also be a stumbling block, in which case our attorneys will prepare for an aggressive showing in court. We know that one party’s ability to pay does not necessarily justify a requested amount of spousal maintenance. For that reason, we prepare an argument based on the case law factors listed above.

Source: Chicago Tribune, “Divorce trial ‘lifestyle analysis’: Ex-wife needs $5 million a year,” Kate Thayer and Amanda Marrazzo, Nov. 2, 2016

May you assign your retirement benefits away in a divorce?

In last week’s post, we discussed the option of collaborative divorce as a strategy for protecting one’s financial privacy during divorce. Yet some court involvement is always necessary in a divorce, such as approving settlement agreements negotiated by the parties. A court order is also required if a couple divides their retirement benefits using a qualified domestic relations order.

As authorized by the Employee Retirement Income Security Act of 1974 (ERISA), QDROs provide a legal exception to the general rule against assigning away one’s interest in a retirement plan. A QDRO allows an individual to use his or her retirement benefits as a source of satisfying marital property or support obligations. An individual may assign some or even all of his or her retirement benefits to a spouse, child, former spouse or other dependent.

QDROs are often issued in divorce proceedings, but a court can also issue them as a separate domestic relations order.  Since QDROs involve both federal and state law, however, our divorce law firm recommends consulting with an attorney who has experience with complex or high-asset property division matters.

There are several ways that a QDRO might divide retirement benefits, and factors such as the type of plan (defined benefit or defined contribution), the amount of benefit paid for retirement purposes, any survivor’s benefit, and the purpose of the QDRO must be considered. For example, using a QDRO to provide temporary spousal support is a very different goal than dividing marital property. The former approach might involve payments from the QDRO for only a limited time; the latter approach might actually split the benefits from the retirement plan, sometimes called a shared payment approach.

In our next post, we take a closer look at other ways QDROs can be used to divide marital property in a divorce.

Source: “QDROs: The Division of Retirement Benefits Through Qualified Domestic Relations Orders,” copyright 2014, U.S. Department of Labor

Tip: Approach your high-asset divorce like a business dissolution

Although a quick divorce may sound appealing, it is important not to rush through the process. This advice especially pertains to high-asset divorces, where complex marital assets may need to be valued and divided. A better analogy would be to approach a divorce like the dissolution of a business.

The process starts with an inventory of assets comprising the marital estate. Assets owned before the marriage are generally excluded from that definition, as are assets identified by a valid prenuptial agreement. If the marriage contributed to the value of a non-marital asset, however, the other spouse may be entitled to a portion. This principle might apply to an asset like a previously owned small business, where both spouses may have enhanced its value during their marriage.

A thorough inventory will also identify assets that are commonly overlooked in the marital estate, such as retirement accounts. A law that focuses on complex and high-asset divorces, like ours, can provide an experienced eye to oversee this process.

Since Florida is an equitable distribution state, property does not have to be divided in divorce in an exact 50-50 split. Yet what a divorce court might deem to be fair under the circumstances is highly case-specific. This is another reason why an individual needs an attorney to advocate for his or her interests in a divorce.

Finally, it is important to remember that a divorce does not necessarily translate into litigation. Indeed, many of our law firm’s clients have been concerned about their financial privacy. Whereas filings in a divorce typically become part of the record, alternative dispute resolution options, such as mediation or collaborative divorce, can produce settlement agreements after confidential negotiations. An attorney can be present during those discussions, ensuring that his or her client’s interests are being protected.

Source: CNN, ” Top 10 Mistakes in High Net Worth Divorces ,” Joey Battah, Jan. 10, 2014

Fact-check the money matters in your Florida divorce

In Tampa Bay homes to homes in Manhattan and beyond, millions of U.S. voters were probably watching the recent presidential debate. The back-and-forth between the candidates often revolved around what was accurate information and what was false. Secretary Hillary Clinton even urged viewers to check her website and its newly added fact checker to verify certain statements said during the debate.

While you might never have thought that there would be distrust between you and your estranged spouse, distrust often does enter the realm of divorce and property division in particular. Just as fact-checking might help voters make the wisest choice for the future of the country, financial fact-checking can help you and your divorce attorney secure your best post-divorce future.

The hiding of assets is a real financial threat to someone’s life after divorce. If a property division agreement is final but hidden assets were not part of that agreement, then your divorce settlement isn’t fair. If your ex knowingly hid certain accounts or marital property from you during the divorce process, he or she committed fraud. As one source warns, though, intent can be hard to prove. Fighting for what is owed to you after divorce is a stress you want to avoid if possible.

That possibility is real through the guidance of a trusted family law team and the resources they trust to uncover financial truths. Our lawyers at Sparkman Law work and collaborate diligently to discover the most thorough and updated picture of your marital estate. Our diligence includes looking at more complex estate matters such as pension plans, retirement accounts, business ownership, investment values and more.

If you know that your marital estate is complicated and/or relatively high in value, do not hesitate to work with a property division attorney whom you trust as soon as possible. Fact-checking what your spouse claims regarding the estate early on can protect the integrity of the divorce process, your financial stability and you from having to fight for what is fair after a divorce is supposed to be final.

Financial stakes incredibly high in high-profile divorce

The relationship between actor Brad Pitt and actress Angelina Jolie has dominated tabloids for years, from their ever-expanding family to their political and professional decisions. They are perhaps one of the most recognized married couples in the world; or at least they were. According to reports, the two have evidently filed for divorce.

Whether you are a fan of Hollywood celebrity divorce stories or not, they can provide some insight into high-asset divorces, which many couples right here in Tampa are going through. In this post, let’s consider the financial aspects of these divorces, as they are often the most contentious elements of a split.

Who owns what?

First, there can be battles over which property is separate and which is marital. Categorizing property is essential, whether you live in an equitable distribution state like Florida or a community property state. However, when it comes to high-asset divorces, the line between “yours and mine” can be very blurry because the assets themselves are more complex.

For instance, do you own a business together? What assets did you enter the marriage with? Were separate funds co-mingled during your marriage? Are there future earnings that should be divided?

Who decides what is fair?

Once you have determined which assets are eligible for distribution, those assets will be divided. Various elements will need to be considered, from state laws to child custody arrangements.

But generally speaking, there are three elements that will determine your asset division: a prenup (if you have one), collaborative discussions and/or the courts. In many high-asset divorces, prenups and the courts will drive decisions; individual spouses may not be able or willing to work out complex arrangements on their own.

What happens after the divorce?

Life after divorce can be tricky for affluent, high-profile people and this is often reflected in a divorce settlement. In order to help make this transition, there may be privacy clauses put in place, spousal support orders enforced and other means of protecting each person’s reputation and financial stability specified in a divorce settlement.

Considering all that is at stake in high-profile divorces, it can be crucial that you work with an attorney familiar with these unique cases. With the guidance of a high-asset divorce lawyer, you can avoid costly mistakes and protect yourself, your family and your financial well-being now and in the future.

Hiding assets before divorce: a mistake that could cost you

If you are affluent and getting divorced, money is undoubtedly a primary concern for you during this tumultuous time. You probably recognize that your marital assets will be distributed in the process, but you also want to protect yourself and ensure you will be financially stable in the years following the divorce.

This pull between having to split up your assets and wanting to keep what is rightfully yours can prove to be much more powerful and frightening than some people expect. In some cases, spouses feel driven to take drastic measures to protect themselves. Unfortunately, this can be a very big mistake if you try to protect yourself by hiding assets.

Hiding assets before your divorce is illegal. Both spouses are expected to be truthful and forthright when it comes to disclosing assets during a divorce, and failure to do this can result in serious consequences.

Among the many consequences that can be handed down, as noted in this Forbes article, you could face:

  • Financial penalties that favor your ex
  • Orders to pay your ex’s legal fees
  • Loss of all hidden assets to your ex
  • Contempt of court charges that result in jail time

These penalties can prove to be financially devastating if there is a significant sum of money at stake; instead of protecting yourself by hiding assets, you could be seriously damaging your financial future.

Rather than resort to unlawful measures in an effort to turn the tables in your favor during your divorce, it can be much wiser to work with an attorney experienced in high-asset Florida divorces to pursue legal means of doing so instead. With legal guidance, you can make sure your separate assets are protected and that any settlement regarding asset distribution is fair.

How to approach a high-asset divorce

Marriage, like a business partnership, is an extremely intertwined financial relationship. It therefore stands to reason that divorce should be an equally intertwined financial experience. Florida residents who have significant financial estates, earnings or assets stand to lose a lot when ending a marriage. It is important for people in this position to take a prudent approach to their property division settlements.

CNN recommends that spouses avoid the understandable urge to agree to almost anything simply to get through the divorce. Care must be taken to properly protect one’s future interest. For example, efforts should be made to ensure assets are not hidden or find them if they are. The tax implications of any potential receipt or loss of an asset must also be reviewed as what may seem a minor decision can have major repercussions.

Forbes adds that professionals be utilized to properly value assets. Appropriately assessing businesses, stock options, artwork, jewelry, life insurance, real estate, retirement accounts and more is no small feat. If a couple has a trust in place, this should also be carefully evaluated when getting divorced.

Another area in which many couples run into challenges when getting divorced, even those that are relatively financially savvy, is the financial determination of a true lifestyle value. Spouses who need and want to maintain their marital lifestyles after getting divorced will need to outline all of the elements that play into those ways of living. Once again, third-party involvement is generally necessary in completing an accurate analysis of what it takes to maintain a way of life.

Tracking a spouse’s activity before or during a divorce

Are you nearing the time when you believe divorce is the inevitable outcome for your marital challenges? You are not alone. Many Florida residents face this prospect every day yet that does not make it easy for you or anyone else. However, at this time, it is important take care of yourself and protect your right to marital assets. Today’s technology provides ample opportunities for people to hide assets or other activities from their spouses. At the same time, the Huffintgon Post notes that technology also makes it more possible for these things to be discovered.

Even without login information to your spouse’s email account, there are many ways you can track online activities and communications. Online browsing can be tracked and special software can be installed on a computer that tells far more than simply what sites are visited as it can record every keystroke. Even following a person on social media can point to clues as asset-hiding spouses can easily get sloppy. Posting information about a big promotion on professional networking sites but not telling you about it could be a flag that income has increased but you are not supposed to know.

In addition to learning about the potential that bank or investment accounts exist that you did not know about, you might also learn about affairs or other things your spouse is involved in. While these may be emotionally difficult things to know, they are important for you to be aware of when getting divorced.

If you would like to learn more about asset division during a divorce, please feel free to visit the page on uncovering hidden assets of our Florida family law and divorce website.

What is a QDRO and when it is needed?

For many couples in Florida today, splitting retirement account assets is a common thing during a divorce. Whether these accounts are still young with many years left to grow in value or they are mature and have been growing for decades, this can be a hard reality for spouses. Letting go of large amounts of saved assets is never easy. However, what can be even harder is watching a good portion of that money be lost to unnecessary taxes or fees.

Fortunately, it can be possible for spouses to prevent the need to pay some taxes or fees when splitting 401(K) accounts as part of a divorce settlement. The U.S. Department of Labor explains that the use of a Qualified Domestic Relations Order is essential to making sure this can be done. A QDRO lets tax entities and retirement plan administrators know that specific financial transactions are approved as part of divorce agreements.

Typically, money is not allowed to be withdrawn from retirement funds except by the fund owner and only for retirement purposes. Specific criteria such as age must be met. Distributions that fail to meet all criteria may be subject to penalties and taxes. Distributions of money to a non-account holding spouse would fall in this category. The use of a Qualified Domestic Relations Order, however, can provide the assistance needed to legally approve the transfer sans penalties or taxes.

This information is not intended to provide legal advice but general information for Florida residents about how to protect against unnecessary asset loss during a divorce.

I’m getting divorced: Will I get alimony?

Divorce has the potential to completely change a person’s life, for better or worse. One of the most significant changes you will experience to some extent after divorce is a change in your finances.

in order to ease some aspects of the financial transition between marriage and divorce, Florida laws allow you to pursue spousal support, or alimony. The more financially secure person pays this money to the financially disadvantaged spouse. However, whether or not alimony will be awarded in your case will depend on several factors.

Generally speaking, the factors that will be considered in assessing an alimony request can be grouped into three categories: financial status of the potential recipient, financial status of the potential payer, and the details of your marriage.

If you are requesting alimony, the courts will look at:

  • Your education level and training
  • Your earning capabilities
  • Your child custody responsibilities
  • Your need for support

If you are being asked to pay alimony, the courts will assess:

  • Your available income
  • The tax implications of paying alimony
  • Your financial resources outside of income
  • You ability to pay support

The courts will also examine the following elements of your marriage:

  • The length of the marriage
  • The lifestyle enjoyed by both parties during the marriage
  • Each person’s contribution to the marriage
  • The reasons why the marriage ended

Based on these and other factors, the courts will decide if alimony is appropriate. If so, they will then determine how much alimony will be ordered and how long it will be paid.

With all this in mind, you may be able to get an idea of whether or not alimony might be awarded in your situation. If there is a need and means available, it could certainly be a factor in your divorce. However, every divorce is different and no two petitions for alimony are the same.

In order to more specifically evaluate your situation and the potential for alimony, it can be crucial that you discuss your case and your post-marital financial concerns with your attorney.

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Sparkman Law Firm
313 South Bungalow Park Avenue
Tampa, FL 33609
4.2 stars - 37 reviews

Phone: 813-374-2000
Fax: 813-374-2031
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P: 813-374-2000
F: 813-374-2031

313 South Bungalow Park Avenue
Tampa,FL33609
Phone
813-374-2000
Fax
813-374-2031