Posted on May 06, 2015 in Complex Property Litigation

The marriage dissolution rate for these couples has doubled in the last twenty years. These "gray divorce" matters are often the epitome of a high-asset divorce. While there may be no complex child custody issues to resolve, the property division can be a Gordian Knot of separate assets, community assets, and commingled assets.

Aging baby boomers were the first demographic group to divorce in significant numbers. Many of these people are now in their second or subsequent marriage, and the fact that the divorce rate is significantly higher in these relationships may partially explain the gray divorce phenomenon. In one study, the authors pointed to unique later-in-life issues — such as the empty nest syndrome, declining physical health, and ailing parents — which can put added strain on a relationship.

The study predicted that gray divorce would increase even if the overall divorce rate remained flat, due to the aging American population.

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 Posted on April 22, 2015 in Complex Divorce

Most Texas courts require parties to mediate a contested family law matter prior to trial. Other times, the parties may attempt to resolve a case before it comes to that point. Mediation is not always successful, but it is almost always worth a try, particularly in a high-asset divorce.

If mediation is an option, the first step is to choose an effective mediator. It is important to use an attorney who practices family law in the area. Anyone else may be unfamiliar with the legal process, with the law applicable to your case and with the judges in that jurisdiction. If a court has ordered the parties to use a certain person, the judge is sometimes willing to reconsider that directive.

Mediations are normally full-day affairs. The parties meet at a neutral location – typically the mediator's office or a conference facility – and the attorneys make brief opening statements. Afterwards, the parties retire to separate rooms and the mediator conducts shuttle diplomacy by conveying offers and counteroffers until an agreement is reached.

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 Posted on April 15, 2015 in Complex Property Litigation

Section 6.711(a) of the Texas Family Code mandates that prior to entering a judgment that divides the estate of the parties," the court must enter affirmative, written findings regarding the value of the community estate's assets, as well as the value of separate assets. Subsequent case law has made it clear that there cannot be a just and right division of the estate if these findings are absent.

Real estate is difficult to value, especially in a high-asset divorce. The amount on the tax roll is usually inflated, so the taxing authority can collect additional revenue. There may be other issues as well. In some cases, the "property" may be an unimproved piece of land. Moreover, especially regarding income-producing property, the sales value may be too high or too low.

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 Posted on April 08, 2015 in Complex Property Litigation

A retirement plan may be one of the largest assets in the marital estate, especially in a high asset divorce case when the parties have been married for a number of years. Section 7.003 of the Texas Family Code authorizes the judge "to determine the rights of both spouses" with regard to a defined benefit pension plan or a defined contribution retirement plan, such as a 401k or IRA.

Each plan is different and has its own rules. Some plans, most notably military retirement plans and some other accounts related to federal government employment, require a special Division Order, as opposed to a Qualified Domestic Relations Order (QDRO). It is important that the QDRO or other order be timely and accurate, or else the IRS may assess taxes and penalties against the Alternate Payee, or non-employee spouse.

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 Posted on April 01, 2015 in Complex Property Litigation

Quite often, asset and property division involve complex accounting measures in high-asset divorce cases.

Assume that Husband owned an investment portfolio prior to the marriage. Initially, he only contributes funds from his separate bank account. As time passes, however, both Husband and Wife begin investing money, and sometimes these funds come from a Wife's separate bank account.

Also assume that Wife owned a rental house prior to the marriage. The couple subsequently elected to take out a second mortgage on the marital residence and use the proceeds to renovate the rental property. Before the renovations, the house was essentially un-rentable and borderline uninhabitable. Since the renovations, the house has been continually occupied by a responsible tenant who pays market-rate rent.

These two examples present significant classification and division issues during property settlement negotiations in a high net worth divorce. It is very important to have an experienced and aggressive divorce attorney who can help craft a plan that is a just and right division of the marital estate, and simultaneously protects your legal and financial interests.

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 Posted on March 24, 2015 in High Asset Divorce

Texas is a no-fault state, and the vast majority of divorces are based on "insupportability," which is Texan for "irreconcilable differences." However, a spouse may still obtain a divorce based on adultery, cruelty, or some other evidence-based ground. An adverse ruling – or a favorable ruling, depending on your point of view – can have a significant impact on a future property settlement in a high-asset divorce.

Section 8 of the Family Code states that "marital misconduct" is a factor when determining the amount and duration of maintenance payments. The statute specifically mentions adultery and cruel treatment, but other types of fault may also be applicable. Meanwhile, Section 7 states that a spouse may be punished in the property settlement, if there is evidence of fraud on the community. Such fraud could include a husband who spends community funds to buy a present for his girlfriend or a wife who has part of her paycheck deposited into a separate account, without her husband's knowledge or consent.

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 Posted on March 10, 2015 in Complex Property Litigation

A premarital agreement can hardly be considered romantic, but it is an important part of a strong marital foundation. Many couples fight over money issues, and although the issue is normally dealing with debt, dealing with large assets can be every bit as stressful.

By executing a solid premarital agreement, you can eliminate a potential source of conflict before it ever manifests itself in the first place. If there is a high-asset divorce later, a premarital agreement may help narrow the issues, and the spouses might avoid a legal battle that is both financially and emotionally costly.

Who Needs a Premarital Agreement?

Persons who are getting married for the second or subsequent time often have some separate property they want to protect. The cash value often pales in comparison to the emotional value, so the property could be a retirement nest egg or a china cabinet. Second-time spouses also may have children from a previous marriage, so a stepfamily can introduce significant inheritance issues.

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 Posted on March 03, 2015 in Child Custody

One of the most difficult decisions, and the most important, that needs to be made during a complex divorce is how will child custody be divided. There are several different options to that question – including sole or shared custody - but the final outcome is decided and approved by the court.

At one time, it was pretty much the standard in child custody cases that the mother would receive sole physical custody and the father would have a set visitation schedule. Typically, that visitation schedule was every other weekend and one night during the week. However, as the norms of society have changed, with fathers taking a more active role in parenting responsibilities, it has become more common for courts to award joint - or shared - custody to both parents.

Multiple studies have concluded that in most circumstances, it is better for children both emotionally and physically to have both parents taking an active role in raising them. According to research documented by the American Psychological Association (APA), children whose parents have joint custody have higher self-esteem, do better in school and socially, have less emotional issues, less behavior issues and get along better with siblings and other family members than children who come from sole custody families.

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 Posted on February 27, 2015 in High Asset Divorce

It is that time of the year again—tax season. Filing income taxes can be stressful and difficult, but if you have recently gone through or plan on going through a high-asset divorce, those difficulties can be amplified by your divorce settlement type.

Exemptions for Dependents

In regards to income taxes, the dependency exemption and child tax credit are very important. If you and your ex-spouse have children together, this is something that you should have stipulated in your final divorce decree. Contrary to what many people may think, the parent who has physical custody of the child is not the one who necessarily gets the dependency exemption. If the non-custodial parent receives the exemption, then the IRS requires a release, signed by the custodial parent, to be attached to his or her income tax return. Failure to do so could cause the IRS to disallow the exemption.

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 Posted on February 20, 2015 in Child Custody

Ending a marriage is difficult enough without having to sacrifice time with children—but given that nearly 50 percent of marriages end in divorce, custody battles are common in the United States. Moreover, even those who have never experienced divorce can sympathize with parents who face complex child custody battles.

Home State Ruling

One of the most important legal aspects of child custody is home state rulings. Determining a child's home state is one of the first steps in a custody dispute. Custody laws differ from state to state, and a home state ruling will provide the legal framework by which a case will operate. Additionally, home state rulings may become important if one parent wishes to take his or her child out of the state. Generally, both parents must know their child's whereabouts at all times, so if one parent takes his or her child on a vacation, out of the state, the other parent must know.

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