Complications of a High Net Worth Divorce in Orange County
California’s Family code attempts to make the dissolution of a marriage or domestic partnership a simple legal process. Unfortunately, there are usually no easy solutions for high net worth couples. All divorcing couples in Orange County must go through the Superior Court Family Law Division. When a couple agrees on the basic issues, it’s often a complication-free process.
- California divorces are no-fault.
- Either spouse may end the marriage due to irreconcilable differences or incurable insanity.
- If one spouse refuses to participate in the legal process, the court grants a default judgment and approves the divorce anyway.
- Simple divorces have an e-file option that allows couples to begin their case online.
- You may purchase a divorce packet from the Orange County clerk and complete most aspects of your divorce on your own.
High Net Worth Divorces are Never That Simple
Divorce is far more complicated when a couple must work through a lifetime of emotional entanglements and divide high-value assets. The struggle to retain marital assets is often genuine. It’s also sometimes a part of one spouse’s strategy to delay the inevitable. Whatever the reason for an asset dispute, the battle often spills over into other critical issues. It not only restricts the divorce’s progress through the legal system, it also becomes emotionally draining for family members. Ongoing disputes are costly for both spouses and they often destroy the chances of negotiating an amicable solution.
Community Property Difficulties
Many couples purchase homes, cars, and other property. They establish retirement and investment accounts, settle injury lawsuits, and generate other incidental assets. Most of these holdings become community property that a couple must divide during a divorce. Many couples rely on an attorney to hammer out a reasonable property agreement, but the assets aren’t usually high enough to cause a long-term battle.
A high net worth couple’s assets far exceed these basics. Simply documenting their wealth often complicates the divorce process. Partner and spouses bring valuable assets into their union. They continue accumulating wealth jointly and separately throughout their years together. Divorce often triggers an instinct to hold on to “things” no matter the financial and emotional cost.
- Inherited Properties
- Multiple Residences
- Luxury Cars
- Assets in other states, territories or countries
Sometimes divorcing spouses employ unique strategies to preserve their personal wealth and avoid an equitable division of favored properties. They sometimes hide assets, transfer properties to other people, use offshore accounts, or other deceptive tactics. These blatantly fraudulent acts aren’t always easily detectable.
To avoid overlooking assets hidden through deceptive means, divorce attorneys hire forensic accountants and other financial specialists. These highly-trained professionals work to reveal hidden assets and appropriately designate them as community property. Judges recognize that divorcing couples sometimes hide their assets. They have leeway to deduct the value of hidden assets from a community property distribution.
Child Custody Issues
California Family Code authorizes family court judges to award child custody “…according to the best interest of the child…” This sounds as though it should be a reasonable process but custody disagreements often lay the groundwork for protracted battles. Whether or not they truly want custody, divorcing spouses often use child custody, support, and visitation rights as pawns to gain ground in other disputed areas.
A custody fight can delay an unwanted divorce. It can become a bargaining chip in an asset dispute. It can simply wear down a spouse, making them more amenable to resolving all of the issues and concluding the process. Under California Family Law both parents have equal custody rights. Ultimately, if they can’t agree on a reasonable sole or joint custody arrangement, the court makes the decision on their behalf.
Spousal Support Challenges
California Family Code authorizes spousal support when it allows a spouse to “…maintain the standard of living established during the marriage…” While spouses haven’t always been thrilled by the prospect of supporting an ex-spouse, the paying spouse received a tax deduction for the amounts paid. The tax code also required receiving spouses to pay taxes on the amounts received.
Recent modifications to the U.S. tax code may encourage spouses to fight against paying spousal support. A receiving spouse will no longer pay taxes and a paying spouse must now pay taxes on the amount paid. This has the potential to increase a paying spouse’s tax liability, resulting in a significant annual financial loss for high-income earners.
Pet Custody Concerns
Recent changes in California statutes require judges to consider “pet animals” during the divorce process. The California Legislature simply responded to popular theories that pets are sentient beings and not just property. The law requires divorce judges to dictate temporary “pet animal” care arrangements. A final divorce ruling will consider sole or joint ownership custody “…taking into consideration the care of the pet animal…” These changes elevate pets to the status of asset dispute bargaining chips.
California codes provide strong support for pre-marital agreements. If a spouse or domestic partner retroactively questions the terms during a divorce, they have limited recourse for nullifying the agreement. Despite legal backing, these agreements sometimes become an issue during a high net worth divorce
Pre-marital agreements are flexible enough to address a long list of assets and circumstances. A couple may choose the applicable laws that govern the contract. They may limit property dispositions when a divorce occurs. In essence, an agreement can dictate any personal right or obligation if it’s “…not in violation of public policy or a statute imposing a criminal penalty…” Also, an agreement can’t limit a child’s support rights.
During a high net divorce, spouses often question the integrity of a pre-marital agreement they signed willingly. The agreements often exclude a spouse’s right to what would be community property in the absence of the agreement. A spouse or partner may attack an agreement’s legal integrity under these and a few other circumstances:
- One spouse forced the other to sign the agreement.
- It was “unconscionable” as defined by the Pre-Marital Agreement code.
- The spouse wasn’t properly advised concerning independent counsel.
If you and your spouse have accumulated extensive assets during your marriage, it’s important to consult with an Orange County divorce attorney. Divorce lawyers understand the importance of getting to know their clients and their circumstances. They take the proper steps to protect their assets and their legal rights. They work closely with their clients from the early stages of a divorce until the final decree.
Your initial consultation with a divorce attorney is an information session only. You simply discuss your situation and learn your options. You retain control over what happens next.