The outcome of high income or high net-worth divorce cases is dependent in part on the geographical location where they occur – simply because incomes and wealth differ (especially between Upstate New York and Downstate New York). In general, a high-income divorce indicates that one side to the divorce has an income of at least several hundred thousand dollars more than the income of the other side, and the level of wealth is usually at least one million dollars.
What Makes High-Asset Divorces More Complex Than Standard Divorces?
A high-asset divorce will not necessarily be more complex than a standard divorce as same often depends on the number and form of assets. For example, if one party is simply a W-2 wage earner, only has one 401(k) account to divide, and only has one house, then that could be a simple – yet technically high-asset – divorce case.
These cases can get more complicated when restricted stock units, invested interests in companies, or partial ownership of companies is involved. There might also be multiple bank accounts where money is coming in and going out, and these accounts would need to be traced. In some cases, the assistance of a forensic accountant may be required in order to adequately opine to the attorney (and ultimately possibly to the court) the amount of income-based monies versus the amount that’s simply being transferred to the account.
Does A High-Asset Divorce Take Longer and Cost More Than A Standard Divorce?
A complex high-asset divorce usually takes longer and costs more money than a standard divorce . In Westchester, New York, a non-complex high-asset divorce might only take a few months, moderately complex cases may take seven months or more, and complex cases could take 11 months or more (& those times-frames are just to get the case trial-ready). Ultimately, the length of a particular case will depend on the number and type of issues that are being contested – such as asset distribution, alimony and child support, and custody or visitation.
Do I Need to Have an Attorney Review Our Prenup or Post-nup Before I File for a Divorce to Ensure Everything Is Enforceable by the Courts? That the Whole Point of These Agreements in the First Place?
You should absolutely have any prenuptial or postnuptial agreement reviewed by an attorney. Yesterday, I had a client come into my office with a postnuptial agreement he and his partner had gotten off some online website. Agreements such as this are most likely unenforceable. Among many other issues, the client’s online agreement did not contain a “certificate of acknowledgement,” which New York State law requires to be word-for-word pursuant to the statute. Any issue with this certificate of acknowledgement makes the agreement itself generally unenforceable.
Another issue with the online agreement was that it purported to resolve child support issues. Under New York State law and the Child Support Standards Act, you have to set forth verbatim what the presumptive calculations are for child support. If you fail to follow the statute to a T, the agreement itself is usually unenforceable.
If my client had tried to push that postnuptial agreement through court without consulting me first, the court would have rejected it – making it a complete waste of time and money.
What Are Some of The Biggest Mistakes People Make in High-Asset Divorce Cases?
Some people operate under the assumption that the only assets which will be divided are those in the account on the date of the divorce filing; as a result of this assumption, they will just transfer money out of their account prior to commencement. In reality, most attorneys will ask for the disclosure of assets at least three years prior to the date of commencement.
Savvy people may predict several years in advance that a divorce is imminent, and as a result they will start getting rid of assets prior to filing for divorce. However, even the money that is transferred or concealed several years prior to a divorce can potentially be traced. All one really has to do is pick up on the pattern of transfers out of an account. If the person transferring the money out of an account does not have an explanation as to where the money went, then the court can treat same as a form of “marital waste.” In other words, the court can treat that money as if it still exists in the account.
Another big mistake people make is failing to keep track of premarital portions of various accounts and comingling property. Without thinking about it, many people will put their spouse’s name on their house or place marital money into a 401(k) account. Once they start doing these things, it becomes much harder to identify what portion of an account is marital versus premarital.
What Are Some Common Questions That Clients Ask in A High Asset Divorce Case?
Many times, clients will ask what resources we are going to utilize in the course of the case. For instance, it’s often helpful to have the services of a forensic accountant in high income support cases.
As another example, early in the process of a contested custody case, you should consider hiring a forensic psychological expert to help prepare for the eventual forensic interview by the court-appointed neutral. Caution should be given however that you don’t want to overly prepare for such an interview. This is simply because a standard question the neutral court-assigned forensic psychological expert will ask is “who prepared you for this interview?” If they say, “my attorney had me sit with an independent forensic psychological expert and they prepared me extensively for this interview,” the neutral court-assigned expert may think the interview is at least to some degree compromised by that.
So, you do want to be prepared – but not in a detailed, scripted format. I wouldn’t generally advise to do a mock interview with a party but more that the independent forensic expert would talk with them about general things which are going to be discussed and how to go about answering certain questions and what to say – and what not to say.
Again, if you’re going to hire an independent forensic accountant, it’s better to hire one early on. If you do it that way, your expert is ready to go the minute the other side starts producing their disclosure to the attorney. You can then just scan those documents & e-mail them right over to the independent forensic accountant – who will then be able to go through them with a fine-toothed comb.
They’re going to let you know whether there are holes in the person’s accounts that are otherwise unexplained. They’ll be able to trace certain deposits and withdrawals. For instance, many times people transfer money between accounts, either from their bank account to their credit card or from one bank account to another bank account. The forensic accountants will trace those transfers between the accounts and make sure they’re all showing up – and more efficiently and more cheaply than the attorney would be able to do. Certainly, if somebody is withdrawing $10,000 from a bank account and that doesn’t show up in one of the accounts, then this is a question you will need to ask them either in the interrogatories or at the depositions – but you’ll want to know this well in advance of setting forth those interrogatories or conducting the deposition.
Is it True People in High Income or High Asset Divorces Are Choosing Mediation Over Trial?
I wouldn’t necessarily say more people than in the past – mediation itself is a concept that’s largely only come about in the last 10 or 20 years. Thus, it depends on how far back you’re setting that initial date. If one is comparing divorce cases in the ‘70s, ‘80s and even into the ‘90s then I may agree – but if one compares the last 10 or 15 years, I wouldn’t necessarily agree. Statistically – especially in divorce cases – about 90% to 95% percent of all such cases will be settled at some point along the road. The courts & lawyers have a variety of methods for settling, including mediation. Nevertheless, in the cases I’ve handled – and I’ve been practicing family law for over 23 years (as of 2021) – the vast majority of them do not settle by going to mediation.
In my experience, it’s rare for parties to opt for mediation once they hire their own attorneys. It’s often more efficient to simply have the two attorneys for the husband and wife negotiate – possibly with the aid of a four-way settlement conference. That’s not to say mediation doesn’t work. It certainly does work when the parties go in with open minds and avail themselves of that process. It’s just that usually when the parties have chosen to hire independent counsel right from the very beginning (which is again the overwhelming majority of the time), they usually just stick with their independent attorneys to negotiate a settlement.
Should I Agree to Unfavorable Terms Just to Expedite the Divorce Process?
There are many different reasons why a party should consider a settlement. I usually talk with my clients using a pure cost-benefit analysis – factoring in what they may be looking to spend in terms of my fees. If I’m representing the more-monied spouse, s/he may be contributing towards the other side’s attorney’s fees as well.
Let’s say the issue is one of maintenance (that’s New York’s term for alimony), and let’s say the parties are maybe a $1,000 per month apart. If you’re at that point in the negotiation you can project out that maintenance will last for about three or four years. If you project that out, then a $1,000 per month difference is $36,000 over the course of 3 years. You will invariably spend $36,000+ taking the case to trial just on your own attorney – and that’s not even talking about what you would spend (if you’re the more monied spouse) on the other side’s attorney’s fees. Consequently, the money you’re spending (by going to trial) is the maintenance money you would otherwise be getting.
At the end of the day, some people just want to get done with their case from an emotional/stress standpoint. It’s nice to just be done and move on with your life. So, there’s those considerations which come into play – and I certainly discuss all of those ancillary issues with my clients to really put it in stark contrast between settlement and taking a case to trial – and what it will cost in dollars and cents, but also what it will cost in heartache, stress, time away from your job and your family to take a case to trial.
What Are the Alternatives We Can Take Instead Of Taking Our High Asset Divorce To Trial?
Two of the most common methods are mediation or simply negotiating a settlement. You certainly don’t have to take any case to trial. As stated above, about 90-95% of cases settle. There is a variety of ways to negotiate a settlement, which would include four-way conferences, mediation, and consulting various experts such as forensic accountants or family counselors.
For more information on High Asset/High Income Divorce In New York, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (347) 797-1188 | (914) 362-3080 today.
Call Now To Schedule A 20-minute Case Assessment
Or Full 50-minute Case Strategy Consultation!
(347) 797-1188 | (914) 362-3080