A divorce is always one of life’s most stressful times. But for high-net-worth individuals, most of whom are business owners, entrepreneurs and successful professionals, a divorce can be a permanently life-altering event. Spouses that never produced a dime of income throughout the duration of a marriage can be handed the keys to businesses, cash flows and real property. Often times, the implications of this can extend far beyond the productive spouse who is being cleaned out of the rightful fruits of their labor. It can also extend to employees of involved businesses, tenants of rental properties and the family, including children from other marriages, of the spouse being sued. It is absolutely crucial, no matter how amicable the proceedings may seem, that any high-net-worth individual who is involved in a divorce seeks the counsel of a highly experienced and talented legal team.
No-fault divorce and equitable distribution create all the wrong incentives
Particularly for those who may have married young, prior to the accumulation of significant wealth, the incentives created by no-fault divorce in the state of New York, along with the so-called equitable distribution method of asset divvying, are perverse enough to be serious cause for concern. For example, if a couple suddenly finds itself sitting on a $10 million net worth, with only one spouse having been responsible for the vast majority of that wealth accumulation, the non-productive spouse will have tremendous incentive to seek a divorce. In fact, this is precisely the type of case that we see taking place every day in the state of New York.
While married, the non-productive spouse may have little actual control over the assets, besides being able to drive a nice car or live in a nice house. They may also have significant perceived restrictions placed on their lifestyle. But with equitable distribution, these spouses know that, at an absolute minimum, they are likely to be awarded a third of the couple’s net worth in a divorce. With New York’s newly enacted no-fault divorce laws, this means that they effectively have an option worth at least $3.3 million, which they can exercise at their discretion. That option is filing for divorce.
And while it may be tempting in the above scenario to think of the non-productive spouse as being a woman and the earner being a man, increasingly, we are seeing high-net-worth women losing everything they’ve spent their lives working for, due to no-fault, frivolous divorces. It cannot be stressed enough. If you are a high-net-worth individual, who is facing a frivolous divorce, it is absolutely crucial that you get in contact with an experienced legal team that can get you results.
The bad news is that, in most cases, divorce will result in non-productive spouses getting something, usually a sizable amount of cash and possibly the house. The good news is that those settlements can be kept in the 10 to 20 percent of net assets range, particularly if the divorce proceedings can be kept out of the courtroom. For many spouses, the temptation of getting a windfall worth more money than they can expect to make in a lifetime of work will prove to be too much. When it does, our experienced and talented lawyers will be there to protect you and your assets.
In 2010, the state of New York went to a no-fault divorce system. While this arrangement sounds benign, in theory, it actually allows for much easier initiation of divorces. This can create hugely perverse incentives, especially in cases where one spouse has a high income or high net worth and the other spouse brought little or no assets to the marriage and has no real earning potential. In cases like these, it is absolutely imperative that the primary breadwinner in the marriage hire the best possible team of divorce attorneys to protect their rights, property and livelihood.
Under a no-fault divorce system, all that is needed to begin proceedings to dissolve the marriage is for one party to claim that there are irreconcilable conflicts present in the relationship. In the state of New York, it is required that these irreconcilable factors persist for at least six months. There are some minimal documentation and filing requirements. But beyond these, a divorce can essentially be initiated at any time by either spouse.
This can create a severe moral hazard for the spouse that does not produce any income or own any assets. Even though New York is a state that follows the equitable distribution concept of asset allocation in divorces, in practice, non-income producing spouses are often able to get half or more of the assets. This often times but not always puts the man at an extreme legal disadvantage. However, increasingly, high-earning women are being victimized by the extreme perverse incentives created by no-fault divorce. Regardless of one’s gender, if they are the high-earning spouse in a high-net-worth couple, it is crucial to hire a competent divorce attorney to avoid being stripped of assets and income.
The typical the non-income-producing spouse walks away with a third of the assets
Even in equitable distribution states, the typical non-productive spouse will walk away with one third of the assets. This becomes extremely problematic when considering the state of high-net-worth marriages. Take, for example, a couple that is worth $10,000,000. Assuming one spouse is essentially responsible for 100 percent of the acquisition of the couple’s wealth, the other spouse stands to make well over $3 million, at a minimum, from initiating a divorce. What’s more, if that spouse has little education or earning potential, the court is likely to view that as a reason to award even more money to the non-productive spouse.
It’s easy to see that in an example such as that above, the non-income-producing spouse now has absolutely tremendous incentive to initiate a divorce, for frivolous reasons or none at all. This is because they will stand to make more money in the simple act of divorce than they could reasonably expect to make over the course of their entire life. In cases like this, it cannot be stressed enough that the income-producing spouse needs to do everything in their power to ensure that their assets and income are protected. A strong legal defense team can ensure that, whatever money, assets and alimony are awarded to the other spouse, they will be on the lowest possible end of the award spectrum.
You probably won’t avoid giving your ex-spouse a big payday in a divorce, but a good legal team can help you keep most of what’s rightfully yours.
Getting divorced is never easy. However, when the parties have a large amount of assets, a divorce can be particularly challenging. There are extra challenges involved in making sure that you get a fair distribution of the assets. It’s also important to make sure you receive the assets that are useful and meaningful to you.
An equitable distribution of the assets
When the court distributes marital assets, they want to make an equitable distribution of the assets. That doesn’t mean exactly equal. That means they look at the entire circumstances, and they make a decision that they believe is fair to all of the parties. The court may look at a number of factors to determine what’s equitable:
To prove a fair distribution of the assets, you demonstrate the contributions that you made to the marriage. You carefully prepare documentation of the value of each asset. This might mean getting appraisals or even working with accountants to value a business. Marital misconduct may play a role. It’s important to work with your attorney to carefully consider what the best evidence might be to support your position and how you might go about gathering this evidence.
What are the assets?
One of the biggest challenges in a high asset divorce case is getting the correct picture of the assets. Not all assets are marital. It can be a bit challenging to know whether a bank account, business or item of personal property counts. For example, if you receive an inheritance during your marriage, it’s typically separate property. However, if you co-mingle the separate assets with marital property, they might become marital. The same is true for property that you take into the marriage.
When you’re working on your case, it’s important to think about what assets you want and why. You may want to retain a business. You may not want to receive assets that you can’t use, because they’re not liquid. You can make a list of priorities. In some cases, you may not even be sure of what accounts or marital assets exist. Your attorney can help you understand the assets in your case and help you think through what you should ask the court for in terms of distribution.
Should I work with an attorney?
When you’re facing a high-asset divorce lawyer, the experience of a New York high asset divorce lawyer can help you build your case in a powerful way. An experienced divorce attorney knows what commonly happens in a New York divorce case. They may have experience with the judge that hears your case. This experience can help you make strategic decisions that work to your advantage.
If a certain type of evidence is particularly effective with the court, your attorney can work with you to build that evidence. If a strategy isn’t likely to be effective, your attorney can explain why. They can also help you handle tense negotiations with the other side. If you’re facing a high-asset divorce, our experienced New York high-asset divorce lawyers can help guide you through this challenge. Contact us today to talk about your case.
Can I change the door locks on the house after he moves out?
If you’re an owner of the house, or a co-owner, you can technically change the locks if you wish. If you live in the house, and your spouse has moved out of the house – you can change the locks if you wish.
Assuming you are the sole owner of the home; your spouse can’t come back into the house without your permission. You are 100% correct to change the locks, and won’t face any legal issues. However, say your spouse is a co-owner on the house, legally speaking – in this case, if you change the locks – you may be in trouble legally.
If your spouse tries to get back into the house, you cannot stop him/her. If your spouse enters the house again, or breaks the locks to the house – he or she will not get in trouble legally. That’s because he/she is also a legal owner – and it’s not illegal for an owner of a home to break into his/her home.
As a result, we typically recommend you have some sort of written agreement in place – when you ask your spouse to leave. This way, it ensures he, or she, will not return to the house. If you fear for your safety, it might be helpful to get an order of protection against the spouse. When you do this, it stops the spouse from returning to the home – even if he, or she, owns the home. This is probably the only way to ensure that even if you change the locks, your spouse doesn’t return back, or trying entering the home without your permission.
With an order of protection, even if she/he enters the home, you can ask them to leave – or call the police, to help force the spouse to leave. If you are afraid of your spouse, we encourage you to contact our NYC divorce lawyers today for a risk free consultation. Many of our attorneys have experience when it comes to dangerous spouses, who may harm you – and try to enter the home again.
What Would We Have To Do To Stop Our Divorce?
In situations where a couple who sought divorce decide they want to stay married, many things must be taken into consideration. First and foremost is it must be clear both parties are agreeing they want to stop the divorce proceedings. If only one spouse wants the divorce stopped, it can be almost impossible to do so, especially if the papers have been filed as a no-fault divorce. In addition, the timing of the request can determine if the proceedings can be stopped. With most courts, if a judgement has not been issued, both spouses can stop the divorce through mutual agreement.
Notice of Revocation
When a couple is attempting to stop a divorce where papers have already been filed, a notice of revocation must be filed with the court as soon as possible. This is an official request to withdraw the divorce petition, and usually has filing fees and court costs associated with it as well. However, when this notice of revocation is filed by the couple, the court will not automatically stop the divorce then and there. Instead, after reviewing the notice, the court will often order the couple to undergo mediation or counseling in order to ensure the decision is mutual and that both parties are of sound mind.
Once the divorce withdrawal is finalized, the divorce proceedings are terminated by the court and the couple maintains their status of being legally married. If during the divorce proceedings any property was acquired, it will remain community property. However, if the couple was separated for a time during the divorce proceedings, some courts may classify any property acquired as separate rather than marital. If a reconciliation happens, the property may have to be reclassified by the court.
Issues Related to Stopping a Divorce
Even though a couple who wants to stop a divorce hopes for as few obstacles as possible, the fact is the court will often take a very close look at these requests. For example, in some situations one spouse may once again change their mind and decide they want the divorce to continue, which can hinder the process even more. If children are involved or if there have been issues regarding domestic violence or abuse allegations of any kind, the court may have the couple undergo psychological or medical examinations to verify all is well. And in extreme cases, one spouse may pretend to stop the divorce in order to delay the proceedings, hoping to obtain better terms in the divorce agreement. Needless to say, this is not a good strategy to take. If the court determines one spouse is guilty of this, it can be considered divorce fraud and lead to serious legal consequences such as contempt of court or other criminal charges.
Do I Need a Lawyer’s Advice?
If a couple has filed divorce papers and then decides to reverse course, the advice of an attorney can be extremely helpful. Not only can the attorney help act as a buffer between the court and the couple, but they can also answer questions regarding property, bank accounts, or children. Along with this, having the representation of a knowledgeable and experienced attorney can add tremendous credibility to the couple’s claim of wanting to withdraw their divorce petition.
While deciding whether to stay married or proceed with a divorce can be incredibly stressful, it is nevertheless a decision that must be carefully examined on many fronts in order to reach the proper conclusion. By talking to each other as well as experienced professionals, there’s little doubt the best decision will be made for all involved.
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