By: Emily Kortright, Esq.
Though divorces are almost always emotionally high stakes, high-asset divorces can be financially and logistically strenuous in addition. For this reason, it is important to know the risks, factors, and legal climate before agreeing to any terms or heading into a trial. The experienced attorneys at The Colwell Law Group will make sure that you never enter a courtroom unprepared.
New York State Domestic Relations Law governs the disposition of all divorces, incorporating the principle of equitable distribution regarding marital property. This means that marital assets will be divided based on what is fair under the circumstances and not necessarily equally between the parties. Parties, attorneys, and the court must consider the following factors when determining what is equitable in the distribution of complex assets:
In any divorce, full disclosure of both parties’ assets is required, but in high-asset divorces, a thorough and detailed accounting of all assets is crucial. Often, high asset divorces include the division and/or distribution of multiple homes, land, businesses, retirement, stock portfolios, deferred compensation, investments, luxury items, and more, thus requiring more in-depth methods of identification and valuation.
Though there is an expectation that the parties will work together to disclose all assets subject to distribution, attorneys may have to engage in a process called discovery, during which they will send demands to disclose, describe, and document all financial assets to the opposing party. Documents received as a result of discovery demands can not only help value different assets but also uncover additional assets that may not have been disclosed.
Though parties may choose to sell different items of property and split the value, oftentimes one party may wish to keep said property and buy the other party out of their share of its value. Therefore, attorneys may resort to seeking out appraisals from experts who are more equipped to determine the value of different assets, as well as the date at which the assets should be valued within the context of the divorce.
If one or both parties own a business or have an interest in a business, they might decide to agree to hire an expert to conduct a business valuation. Business valuators can review tax returns, financial statements, and other internal and external documents to estimate the total value of a business after consideration of its assets and liabilities, historical profits and losses, and more. Once a business or a party’s interest in it is properly valued, the parties will be more equipped to determine an equitable method of dividing its value.
Once all assets have been disclosed, the parties and their attorneys must determine what assets (or portions thereof) are marital property versus separate property. Marital property is almost anything that is acquired during a marriage, by one or both parties. In general, separate property is anything that one party purchased or acquired prior to marriage. This includes real property, financial accounts, possessions, and more. Some items, such as gifts or inheritance, are considered the separate property of whoever receives them, regardless of whether the item is received prior to or during marriage.
However, co-mingling of assets, such as depositing funds from inheritance into a joint account, investing personal funds or effort into a partner’s business or separate property, or even saving for retirement over the course of a marriage, can transform separate property, or a portion of it, into marital property.
Consequently, attorneys and their clients must then determine which assets are subject to equitable distribution in their entirety and what portions of other assets may be subject to equitable distribution. Utilizing the identification and valuation methods listed above is one of the means by which attorneys can determine the marital portions of all assets and the ultimate equitable distribution of some.
In New York State, the lesser-monied spouse is entitled to spousal maintenance, provided their income is not comparable to the more-monied spouse, and presumptive counsel fees.
In awarding spousal maintenance, a court will consider factors such as the standard of living enjoyed by the parties during their marriage, each party’s income and potential earning capacity, and the duration of the marriage, as well as the monetary and non-monetary contributions to the relationship by each party. In high-asset divorces, a competent attorney can help determine which assets will be considered for the purpose of evaluating spousal maintenance and which should be excluded.
In awarding counsel fees, a court’s main purpose is ensuring that both parties have comparable access to fair legal representation, and that the more-monied spouse cannot utilize their own financial resources to pressure the lesser-monied spouse into accepting a less equitable settlement. Though the lesser-monied spouse is presumed to be entitled to reasonable counsel fees, a judge may consider factors including the income and earning disparity between the parties, delays brought on by one of the parties, or bad faith actions in determining what amount is appropriate. For this reason, retaining an attorney who can conduct discovery, valuation, and negotiations in a professional and efficient manner can mean a difference of thousands of dollars in attorneys’ fees.
Prenuptial agreements are priceless tools in protecting substantial assets, but they also help to simplify divorces in the long run. By acting as a snapshot of each party’s assets at the time immediately prior to the parties’ marriage and outlining how each asset should be distributed in case of an operative event, a well-drafted prenuptial agreement can do the following:
At the end of the day, individuals involved in a high net worth divorce need legal representation that is experienced in navigating the complexities associated with robust, particularized assets. Luckily, the attorneys at The Colwell Law Group are experienced in navigating clients through these trying times, both by way of proactive and reactive legal strategies. Our firm combines legal precision with financial insight to provide strategic, results-driven representation tailored to each client’s needs.
If you are facing a divorce involving significant assets, contact the Colwell Law Group to schedule a consultation and learn more about how we can best protect you and your assets.
At the Colwell Law Group, our number one priority is always our clients. The members of our team have decades of combined experience in negotiating and trying family law cases. We are able to use our experience and our knowledge of the courts and New York family law to act as advocates for our clients. Our lawyers are dedicated to serving our clients’ best interests while also allowing them to feel heard and understood. We want to ensure that they trust us and understand why we do what we do. Colwell Law has numerous attorneys who are experienced in Family Law that can help put you at ease. Call for a free consultation.
Colwell Law
N/a 
(518) 462-4242
