Couples involved in high net worth divorce must take extra care when dividing their assets. Determining the value of each asset as well as what portion belongs to each person can be complicated, especially if offshore accounts are involved.
Texas is a community property state. This means any asset originating during the course of marriage is subject to division between the spouses during divorce. Furthermore, high net worth divorces are subject to a few factors that don’t often arise in standard divorces.
These factors include:
- Pre-Nuptial Agreements
This legal contract is common when two people of means marry each other, or when a person of means marries a person with considerably less wealth. However, just because this agreement exists doesn’t always mean it is legal or valid. A judge could determine the pre-nuptial agreement to be invalid if it is believed to have been signed under false pretenses. For example, if one spouse hid some of their assets by not disclosing them on the agreement.
- Property Division
Every couple that enters into a marriage does so with their own separate property. Separate property will stay separate even after a couple divorces. Unless otherwise stated in a pre-nuptial agreement, the property and assets a couple accumulates throughout their marriage will be divided in a way the court deems fairest.
Sometimes community and shared property can get mixed together in complicated ways. Say one spouse sold a house they owned before they got married. They use this money to buy a different house while married to their spouse. The house would still be considered separate property unless they use their paycheck to pay off any remaining mortgage. A paycheck received while married is classified as community property. To untangle the home from this type of confusion requires a skilled high net worth divorce attorney who can navigate the legal intricacies involved in the process of property division.
- Business Issues and Forensic Accounting
A forensic accountant is a person who analyzes financial information in legal proceedings. In a high net worth divorce, a forensic accountant will closely review the income tax returns of both parties.
If the couple own a business together, the forensic accountant must look at:
- Employee compensation (other than a regular paycheck);
- Electronics, automobiles, and any other valuables purchased to be used in the business;
- Stock options, bonuses, and commission pay; and
- gross income (to satisfy any support obligation)s.
The wealthier the couple, the more assets and property they will have. If the couple has multiple businesses, the forensic accountant will need to look extra carefully so they don’t miss any instances of fraud or embezzlement.
Reach Out to Cynthia Tracy, Attorney at Law, P.C.
If you have a high net worth estate and are going through a divorce, reach out to our firm today. We have extensive experience with high net worth cases and can help you seek a fair settlement.
Contact us online or call us at (281) 612-5443 for a consultation.
