While all couples going through a divorce will undoubtedly find the process stressful, high net worth individuals run into several issues that the average person usually does not need to consider.
Division of Large Assets in Florida Divorces
One of the things that complicates high net worth divorces more than others is the presence of numerous large assets. High net worth individuals tend to have more than one home, land, multiple vehicles, and one or more businesses to consider when dividing their assets. Florida follows the law of equitable distribution, meaning courts will divide martial property (as opposed to nonmarital property) in the fairest — but not necessarily completely equal — way.
Marital homes and vehicles will be divided in the same fashion as other divorces, but businesses take more time and require more work to resolve. Before you can start dividing a business, you have to place a value on it. The leading method for valuing a Florida business during a divorce is hiring a specialist. Most often, this task will be performed by a forensic certified public accountant (CPA), who will appraise the value of the business by examining a number of factors, including:
- Nature of the business
- Size of the business
- Properties owned by the business
- Financial records
- Business accounts
- Business reputation and good will
After examining all the relevant aspects of the business, the CPA can use a fair market valuation (based on what an everyday buyer might offer in a sale) or an investment valuation (based on what a knowledgeable industry buyer might offer in a sale). The CPA can rely predominately on the business’ present income, its potential for future earnings, the value of comparable business, and/or a straight calculation of the business’ assets minus its liabilities.
Once the value has been assigned, the court overseeing your divorce will order a division of the business by liquidating it, awarded it solely to one spouse with a possible cash or property offset to the other spouse, or awarded an interest in the business to both spouses. Especially when a couple has multiple businesses to tackle in their divorce, this whole process can be extremely contentious.
Payment of Alimony
High net worth individuals have a greater likelihood of having orders to paying alimony in their divorce agreements. Florida law provides for four different types of alimony, which the court will order based on the particular circumstances of the marriage.
- Bridge-the-gap alimony – Bridge-the-gap alimony is awarded to assist one spouse by providing support to allow him or her to make a transition from being married to being single. It is paid for the purpose of legitimate, identifiable short-term needs and may not exceed two years in duration.
- Rehabilitative alimony – Rehabilitative alimony is awarded to assist one spouse in establishing the capacity for self-support through redevelopment of skills, education, training, or work experience. It must be part of a specific and defined plan and is intended to be short-term in nature.
- Durational alimony – Durational alimony is awarded when permanent alimony might not be appropriate. It is paid to provide a spouse with economic assistance for a set period of time following a marriage.
- Permanent alimony – Permanent alimony is awarded to provide for the needs and necessities of life as they were established during the marriage of the parties for a spouse who lacks the financial ability to meet his or her needs and necessities of life following a divorce. Permanent alimony is generally reserved for long-term marriages (17 years or longer) and will be awarded for short-term marriages (less than 7 years) only in exceptional circumstances.
In considering whether one spouse needs to pay alimony to the other, the court will look at several aspects of the marriage, including:
- The duration of the marriage;
- The standard of living established during the marriage;
- Any infidelity in the marriage;
- The age and physical/emotional condition of each spouse;
- The financial resources of each party, including BOTH marital and nonmarital assets;
- The earning capacity, education, vocational skills, and employability of each spouse;
- The contribution of each spouse to the marriage, including homemaking services, child care, education, and career building of the other spouse;
- The responsibilities each spouse will bear with regard to any minor children;
- The tax treatment and consequences to both spouses of any alimony;
- All sources of income available to both spouses, including income from investments and assets.
Payment of Child Support
Any couple with minor children will have to consider payment of child support upon their divorce. But in high net worth divorces, support and custody agreements can become a more complicated issue because of the parents’ substantial resources and the unique opportunities present to the children.
Child support is ordered for minor children based on the needs of the children, including any special needs a child might have, the resources of parents, and the standard of living the children would have enjoyed if the marriage remained in tact. Courts do not want children to experience an economic disadvantage because of their parents’ decision to divorce.
Florida has guidelines set out in Statute 61.30 that determine a presumptive amount of child support based on the combined income of the parents. The scale ranges from a combined income of $800 per month to $10,000 per month, and courts have some leeway in stepping outside these guidelines (usually only by 5 percent), depending on the circumstances. For parents whose income exceeds the guidelines, the court will have to calculate child support based on a statutory formula, which makes things a little trickier.
Potential Media Involvement
When high net worth individuals divorce, another thing that tends to complicate matters is the media following these people might have. Celebrities, athletes, and high-profile business owners will have to try to resolve their marital disputes under a camera lens, dodging articles that try to shed light on what happened and who is getting what.
In a media-intense divorce, it is more important than ever to maintain transparency between the spouses and confidentiality as to the rest of the world. The last thing you need during this time is to read on the internet that your spouse has more assets than you thought, or your spouse was unfaithful during the marriage. Being honest and proactive will help you avoid a frustrating run with the media.
The Importance of Hiring Counsel
The best thing you can do for yourself during this stressful time is hiring an experienced attorney who will protect you, your assets, your family, and your privacy. This is not a time to go it alone, especially if you end up requiring a trial to completely sort things out.
If you are contemplating a divorce in Florida involving high-value assets, you need a skilled lawyer who knows the system. Attorney Beryl Thompson-McClary has 28 years of litigation experience and is extremely dedicated to achieving the best results for her clients. Schedule a confidential consultation today at no cost to you by calling our Orlando office at (888) 640-2999.