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Financial Steps to Take Post-Divorce
When a person goes through a high-asset divorce, there are always adjustments that will need to be made—both personally and financially. This can be particularly true if one spouse was the primary or sole breadwinner in the family and the majority of the couple's income came from that spouse's earnings.
Traditionally, it is the wife who may be hardest hit financially after a high-asset divorce. Statistics from the U.S. Bureau of Labor Statistics reveal that women only earn 77 cents to every dollar that is earned by men. After divorce, according to the U.S. Census Bureau, a woman's income decreases by almost 40 percent. This can exacerbate an already stressful economic situation.
How to Uncover Hidden Assets in Complex Divorce Litigation
It is all too common, especially in a high-asset divorce, for one spouse to attempt to hide assets and property from the other spouse in an effort to deprive that spouse of his or her fair share of the marital estate. According to one survey, in two out of three marriages, at least one spouse is hiding assets from the other.
Typically, a spouse who is hiding the assets implemented a plan to do so long before the decision to divorce was "official" between the two. This deception can be done in a number of ways, including transferring assets in other family members or friends names, secret accounts, and safe deposit boxes. It was not so long ago that trying to uncover hidden assets was almost impossible; however, with the technology available today, as well as required legal documentation because of federal laws such as the Patriot Act, it is almost impossible to not leave some kind of electronic footprint of asset transfers.
Forensic Accountants in High-Asset Divorces
When involved in a high-asset divorce, there are key issues which top the list of importance. Child custody may be number one if a divorcing couple has young children. However, for divorcing couples who either do not have children or have children who are grown, their number one priority often involves finances.
Texas is a community property state. This means that all property a couple has acquired during their marriage needs to be split evenly between the two spouses. Additionally, besides the usual bank accounts, divorcing couples involved in a high-asset divorce may own assets such as stocks, professional practices or businesses, various trust accounts, retirement plans, and insurance plans. Couples may have multiple properties in differing states or in foreign countries, as well as antiques, art, and other expensive collections. All of these items make up the marital estate and need to be evenly divided between the two spouses.
Child Support in High-Asset Divorces
When married parents are going through a high-asset divorce, two issues that need to be decided are child custody and support. Depending on what the parties agree to, and/or what the court decides, the parent who typically has less physical time with the child will be responsible for paying child support.
The purpose of child support is to ensure that both parents are contributing to the financial care and cost of raising the child. Unfortunately, and all too common, the parent who is ordered to pay the child support does not see it that way, but instead sees it as money he or she is paying to their ex-spouse. For various reasons, the paying parent does not, or will not, accept that it is their duty as a parent to contribute to the child's financial needs.
Periodic or Lump-Sum Settlement: Which Alimony Payment is Best?
A common stipulation in high-asset divorces is alimony, also known as spousal maintenance. Alimony is money that one spouse is court-ordered to pay the other spouse. Unlike child support, alimony is completely up to a judge's discretion. In September 2011, Texas HB 901 amended the rules regarding alimony in this state, including increases to the amount and length of time a spouse may be entitled to spousal maintenance.
Traditionally, there are two ways alimony payments can be made in high-asset divorces—either periodic alimony (which is paid on an established schedule i.e. monthly) or in a lump-sum payment. There are benefits and disadvantages to each of these two methods, and an experienced complex litigation attorney can help determine which is best for your situation.
Sharing All Financial Decisions Could Make for a Happier Marriage
A recent survey suggests that couples who share financial decisions are happier than couples where only one partner handles all money matters. Sharing those financial decisions also makes it more difficult for one spouse to hide money from the other, which often helps with negotiations during high-asset divorces.
The survey involved just over 2,500 participants who were either married or in long-term relationships, and were also classified as "high-net worth investors." The survey revealed that although the majority of the couples said they shared financial decisions with their partner, the responsibilities appeared to be gender specific, especially when it came to making decisions on investing. While women in high-asset marriages were equally involved in the day-to-day decisions, they were often not actively involved in the investing decisions. Those decisions tend to be made strictly by the men, even for younger couples.
Children of High Asset Divorce Suffer Most from Parent Breakup
There have been numerous studies done regarding the effects that divorce has on children. Several studies have concluded the negative impact parents breaking up have on children. However, a new study has found that it is actually children of high asset divorces who suffer the most from their parents' breakup.
A team of researchers from Georgetown University and the University of Chicago analyzed data that was taken from the National Longitudinal Survey of Youth (NLSY). That federal survey initiated in 1979 in order to examine how children are affected by family changes, such as divorce or separation. In 1986, the NLSY survey team also began assessing children born to women who were participating in the survey. The women were asked questions to determine the socio-economic state of their children. The assessments were conducted every other year until 2008, when the children reached 12 years of age.
Domestic Abuse in High-Asset Divorces
Every day in this country, three women die because of domestic violence. Every year, more than 10 million women and men are victims of domestic violence—that is 20 victims per minute. One in three women and one in four men have been victims of domestic violence.
October is domestic violence awareness month. One of the things we need to be reminded about is that domestic violence does not discriminate. Victims come from every walk of life and every socioeconomic background. Even a spouse who is involved in a high-asset divorce can be a domestic violence victim.
There are steps that all domestic abuse victims need to take to get away from the abuser. It is critical to have a safety plan in place. One resource for victims is the National Domestic Violence Hotline (1-800-799-7233) which has safety advocates available 24 hours per day. Any person accessing the hotline, or any websites in an effort to formulate a safety plan, needs to be very cognizant of the fact that his or her abuser may be monitoring their phone or computer. Therefore, use devices that cannot be monitored such as a friend's phone or a library computer.
Utilizing a QDRO to Collect Back Support in High-Asset Divorces
It is a frustrating reality of divorce, but many ex-spouses do not honor the terms of their high-asset divorce settlement, especially when it comes to child support and/or spousal support. After what can be months, or even years, of drawn-out, complex litigation, the support checks the obligor spouse is supposed to pay stop coming, sometimes before the ink is even dry on the divorce decree.
Trying to collect back alimony or child support funds from an ex who refuses to pay often involves even more litigation and more legal expenses. However, one tool that many high-asset divorce attorneys are beginning to utilize in order to assure their clients receive the assets they are entitled to is the Qualified Domestic Relations Order (QDRO).
How to Protect Your Assets before You File for a Complex Divorce
One of the most important steps you can take before filing for a complex divorce is to protect your assets. This is especially critical if you expect the divorce to be contentious, and involve complex property litigation and other high asset issues.
To begin, make copies of all important financial documentation and paperwork from the past five years. Keep the documents in a safe place where your spouse will not be able to access them. Be sure to collect records of any bank accounts, investment portfolios, mortgage payments, retirement accounts, credit card statements, insurance policies, and income tax returns. Also, make copies of deeds to all properties owned by you and your spouse, as well as copies of titles to any vehicles and boats. These documents will help your attorney prepare your financial affidavits, as well as provide an accurate record of all the assets that make up the marital estate.
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