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Recent Blog Posts
High Asset Divorce and the Family Business
Although there is nearly always some overlap, most assets in a high net worth divorce fall into one of two general categories. Some property items, primarily things like securities brokerage accounts and retirement nest eggs, are prized mostly for their economic value. Others, such as a primary residence or vacation property, have a greater emotional value.
A family business is one of the rarer items that is very much a mixture of both these elements. In many cases, a business is a couple's primary source of income, or even the only such resource, so it has tremendous economic value for both the husband and wife. At the same time, especially if it was founded during the marriage, both parties have a great deal of "sweat equity" in the endeavor.
What Happens to the Business?
This question must always be answered, and there are several options in terms of the business' disposition.
Texas Family Law and the Changing American Family
Could informal marriage be the next big transition in family law? Such relationships are already becoming the norm in many parts of Latin America, and the cultural shift could well follow these immigrants to the Lone Star State. For example, in Columbia, 84 percent of babies are born to unmarried mothers. There are similar statistics in a number of other countries, including Mexico.
The trend could most likely affect Texas because it is one of only a handful of states that recognizes informal marriage for all purposes. While it is relatively easy to enter into a common-law marriage, such a relationship can be difficult to dissolve, even in a high-asset divorce.
Formation
An informal marriage must be established by a preponderance of the evidence. To meet this burden, a party can either introduce a signed declaration of informal marriage or, more commonly, establish the three elements required by the Family Code:
Dealing with Parental Alienation Syndrome
In a development that placed the spotlight back on parental alienation syndrome in complex child custody cases, two missing teenage siblings were recently reunited with their divorced father whom they claimed was physically abusive.
The saga began when a Minnesota court granted the girls' father sole custody in a divorce proceeding. Shortly thereafter, the 16- and 17-year-old girls ran away from home and were sheltered by a woman who is a vocal supporter of the "Protective Parent" movement. Members of this group shelter children who claim to be fleeing from abusive parents when a court has ordered them to remain in the home. The girls' mother, who accused her husband of physical abuse and whom authorities suspect of aiding in her daughters' disappearance, was arrested and charged with two counts of felony interference with child custody and one count of involvement in a kidnapping.
High Asset Divorce Fraud
In many respects, a stick of dynamite and a high-asset divorce have a great deal in common. Prior to the inevitable explosion, there is a burning fuse. Sometimes the fuse is very short; for example, there may have been an extramarital affair or an outburst of physical violence. Other times, the fuse is considerably longer, as differences simmer and eventually escalate into conflict. This process often takes place over the course of years or even decades.
Especially in the latter scenario, some level of fraud, or attempted fraud, is nearly inevitable. Since a spouse anticipates a high net worth divorce, there is ample opportunity to conceal assets. Fortunately, there are affirmative steps that an attorney can take to mitigate or erase the damage.
Preventative
To continue the above analogy, there are a number of telltale property fraud indicators to look for as the fuse burns down, including:
Child Support Guideline Deviation: Not Enough or Too Much?
The child support guideline amounts in Section 154 are presumed to be reasonable. But consider the following situations:
- The obligor parent is a server at a local restaurant; the obligee parent is an engineer at a large technology company;
- Father is now financially responsible for three stepchildren after a subsequent remarriage;
- Mother must travel to another state to see the children because Father relocated with the children;
- The family includes two preschool children that are in daycare and two school-age children that require after school care; or
- Because of a child's pre-existing medical condition, insurance is expensive and refuses to cover certain treatments.
The cookie-cutter guidelines might be considered "unjust or inappropriate" under Section 154.123 in any of these situations.
Have You Overlooked These Issues in Your Texas High Asset Divorce?
The more assets you and your spouse have, the more complicated your divorce will be. Trying to manage the emotions as well as the future financial impact of the breakup of your marriage is a big job. Before you get too far into discussion about how to split up the property or how support should be paid, make sure you don't overlook these common issues in high-asset divorces.
IRS and Asset Transfer
In a typical divorce, the transfer of ownership of property or assets from one spouse to the other does not create a taxable event. The IRS is not going to charge you income taxes for giving your spouse title to the car in the divorce.
However, in many high-asset cases, some property is not held in the name of either spouse. Instead, a closely held company or some other form of holding company may hold title. When assets are transferred out of corporate ownership the transfer may create a tax obligation. Make sure you understand the possible tax ramifications of any transfers.
Anchors Aweigh: Paternity Leave for New Fathers
It appears that the United States Navy may be the latest organization to jump on the bandwagon of extended paternity leave for new fathers.
During a recent visit to Pearl Harbor, Hawaii, Admiral John Richardson presided over an impromptu meeting that included himself, Master Chief Petty Officer of the Navy Mike Stevens, and ten sailors who had become new fathers within the past year. Currently, the Navy provides ten days of paid paternity leave, and Admiral Richardson asked the sailors what they believed a reasonable leave policy would be. After a brief conference, they proposed 30 days of paid leave. Admiral Richardson told the group that "it's great to get a sense for what your input will be," and he promised to pass the recommendation along to his superiors in Washington.
The meeting comes shortly after the Navy tripled paid maternity leave to 18 weeks. In the last several months, Amazon, Netflix, Microsoft, and other large companies have all expanded their paternity leave plans, or at least are considering such action.
Collaborative Law: There Are Alternatives to Fighting
A growing number of high-asset divorce cases are resolved through the still-controversial method of collaborative law, during which the parties work together to find mutual solutions to problems stemming from child custody, spousal support, property division, and other complex property litigation issues.
The method is controversial because it totally eschews the traditional adversarial model. Assume that, instead of playing a football game in Waco or Austin, officials from The University of Texas and Baylor met to compare their teams' statistical profiles and then enlisted the help of sportswriters and broadcasters to determine a winner. Collaborative law is not nearly that radical, but it is in the same general neighborhood.
Critics maintain that attorneys can only "zealously" represent their clients, as called for in the canon of ethics, in a courtroom shootout. However, good lawyers are very adept at far more than simply making arguments.
Overcoming Hurdles to Spousal Support in Texas
While many states are restricting their alimony laws under tremendous pressure from advocacy groups, Texas has expanded its spousal support laws in recent years, albeit not by much. As a result, spousal support is still rather difficult to obtain. In other states, alimony is an important element of almost every property settlement in a high-asset divorce, but that is simply not the case in the Lone Star State.
Needs Presumption
To receive any long-term support ("long term" being more than a few months), the requesting spouse must overcome two hurdles in Section 8 of the Family Code.
First, Section 8.503 flatly states that maintenance is not available in a Texas family law case. The only way to overcome this presumption is to introduce evidence that the requesting spouse has "exercised diligence" to earn sufficient income, or acquire sufficient skills, to meet the spouse's "minimum reasonable needs."
Some Questions and Answers about Adoption
Adoption is one of the most delicate legal procedures in the Texas Family Code. Properly executed, this process brings a lifetime of joy to an adopting family. But if done improperly, this complex child custody proceeding can mean an almost unheard of amount of heartache and disappointment, to say nothing of an incredibly high financial cost. Given the amount of precision required, it is a tremendous advantage to partner with a board certified expert in a Texas adoption.
Finding a Birth Mother
Many prospective adoptive families simply make subtle inquires in their circle of friends to find a possible birth mother. Another option is to use the services of an adoption facilitator, who will perform much or all of the legwork involved. Advertising online, in a newspaper, or on a college bulletin board may also be an option, but there are legal and institutional rules to comply with in this area.
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