Articles Posted in Family Law

As a business person going through divorce, you have many worries that relate to your business assets. Not the least of these is that you and your attorneys will work hard, engage the other side in good faith, and eventually reach a resolution that is approved by both parties and the court, only to have that outcome unraveled by subsequent litigation by your ex-spouse. Wherever you are in the divorce process, don’t leave your substantial business interests to chance; instead, be sure that you have the knowledgeable South Florida divorce counsel you need.

As many business owners will attest, a business may be only one lost contract from financial crisis and one new contract from being flush with cash. These changes can happen literally overnight. Not all massive upticks in your business that happen shortly after your divorce goes final are the result of malfeasance, but your ex-spouse will probably try to argue that it was.

Take, as an example, a famous TV producer known for his police-and-prosecutors prime-time dramas on network television, but who was in the headlines recently in relation to his divorce. The producer and his wife worked out an agreement to resolve their divorce in 2003. The wife agreed to take a cash payment of $17.5 million and alimony of $2 million per year for eight years. She also got a house and other assets. At the time, the producer’s crime drama shows were allegedly valued at $4 million. Shortly after the divorce went final, the Los Angeles Times reported that the producer had signed a new contract with the network. The newspaper described it as a “billion dollar deal.”

When you enter into a marriage – and you are someone with substantial assets that you own in your name alone – there are several concerns you may have (in the event of a future divorce). There are also several ways to address issues related to the large-value assets you possess prior to your marriage. A pre-nuptial agreement may be one way to approach the situation. Another way is simply to ensure that your separate property is kept completely separate and is never mixed (or what the law calls “commingled”) with your marital assets in any way. As always, if you have questions about your high-value separate assets and your marriage, talk to an experienced South Florida divorce attorney.

The residence or residences you own may represent a substantial portion of your overall wealth. Whether it’s a condo on Fisher Island Drive or a house in Coral Gables, your real estate holdings are an important piece of your overall financial picture and, certainly, losing 50% ownership of such a property simply due to a contested divorce is something you probably want to avoid. For E.E.S., his was a more humble property in Cutler Bay, but his legal case is still instructive for people with high-value assets.

The husband purchased the home with his own money in 2003. In 2005, he married the wife. Even after the couple’s wedding, the home remained titled in the husband’s name alone. During the couple’s marriage, the husband was the sole source of the couple’s income and his funds were the sole means by which the home’s mortgage payments were made. The evidence that the lower court heard offered nothing to indicate that the wife contributed anything to the value of the home. No marital labor, no improvements to the home, no financial contributions. Nothing.

If you are an executive or senior manager of a business, then there is a reasonable chance that the income you receive from your work comes in payments that are a bit more complex that just X dollars per hour or Y dollars per year. You may receive a combination of salary, commissions, bonuses or other payments that are, when taken together, structured to represent your true compensation. This can potentially create challenges, however, if you go through a divorce. The precision of your marital settlement agreement may make huge differences in matters like alimony, as the exact definitions used may alter how much you are legally obliged to pay. When it comes to negotiating or enforcing a marital settlement agreement as a corporate officer or manager, be sure to look to a South Florida family law attorney experienced in handling scenarios like yours.

Take, for example, the case of D.W. and his wife H.W. The husband was a corporate executive and he was “subject to different compensation programs.” At various times, he received a base salary, income deferrals, and the opportunity to receive performance-based bonuses.

When D.W. and his wife divorced, they entered into a marital settlement agreement that resolved, among other things, alimony. The agreement stated that the husband owed the wife alimony in the amount of 30% of the husband’s gross income. The contract defined gross income as “periodic income that Husband receives as a direct result of his employment efforts, before considering any deferrals and tax affected retirement savings husband may elect to have deducted from his pay.”

Sometimes, your divorce may have a substantial impact on your personal life but be limited to that. Other times, your divorce has the potential to impact both your personal life and your business life. A court order in your divorce case that freezes all your assets, for example, may have a significant and debilitating effect on your business activities, as well as impair your ability to meet your personal financial obligations. Avoiding such problems requires many steps, including mounting an aggressive defense to avoid outcomes like an injunction that freezes your assets. When you find yourself in such a divorce battle, it pays to have skilled South Florida divorce counsel on your side.

A recent Broward County case was an example of this. In the case, the wife, C.O., had obtained a divorce judgment that required the husband, W.O., to pay both alimony and child support. Sometime later, the wife obtained a judgment for certain unpaid amounts of alimony and child support. Following her obtaining that judgment, the wife went back to court and sought an injunction that would have frozen all of the husband’s assets, including his impending inheritance.

When your spouse seeks an injunction, such as one that would freeze all of your assets, the law requires her to provide the court with certain evidence before the court grants the request and issues the injunction. For one thing, the party who asked for the injunction has to demonstrate that she has a substantial likelihood of winning in the underlying litigation action. Additionally, she has to show that, if the court doesn’t grant her the injunction for which she’s asked, then she will suffer “irreparable” harm. Generally, any type of harm that can be fully and fairly compensated later through an award of money damages cannot constitute “irreparable” harm under the law.

Sometimes, if you possess substantial assets, you may find yourself in a situation in which personal affairs and business affairs overlap. For example, what happens if you discover that the spouse whom you are in the process of divorcing has improperly taken funds from your accounts? Must you litigate these issues in the divorce, or can you bring a separate civil lawsuit? If you find yourself facing a circumstance like this, you should be certain to contact knowledgeable Florida divorce counsel in order to get the answers you need to protect yourself and your business.

The questions in the preceding paragraph were central to a recent case originating in Palm Beach County. In that Palm Beach case, the husband held several substantial assets that, according to the husband, the wife improperly re-directed to herself and her mother. According to the husband’s lawsuit for breach of contract and tortious interference with a business relationship, the wife’s misconduct caused the husband to be rejected for a mortgage on a $2.5 million house.

At the same time that the husband was attempting to proceed with his tortious interference and breach of contract case, he also had filed a petition for divorce. The trial court in the husband’s contract case concluded that the contract lawsuit must be dismissed. Whatever misconduct the wife did or did not commit, she did it during the marriage, which meant that the divorce case was the one and only proper place to litigate those issues, according to the trial judge.

There are high-wealth South Florida divorces and then there are very high-wealth divorces. Back in July, the Palm Beach Post reported on the divorce of a couple who achieved significant success together in real estate, amassing wealth estimated to be around $750 million. Then, after more than six decades of marriage, the wife filed for divorce. The case presents an example of the many issues and complexities that can come into play when high-wealth individuals decide to divorce.

The then-newlywed couple, starting in the early 1950s, took a few investment properties and a business established literally in their kitchen and, over the next six decades plus, built an empire worth close to three-quarters of a billion dollars. Then, in 2016, the wife filed for divorce. The alleged motivation for the split was one that was not particularly unusual. According to the Post, the wife claimed the husband had found a new love and refused to end the relationship after she demanded it.

However, most couples’ divorces don’t entail numerous multi-million-dollar assets. The portfolio included shops in Palm Beach, restaurants in Delray Beach, bars in the Keys, and retail complexes in New York. The couple’s Palm Beach County assets alone were estimated to be worth roughly $160 million. Divorce matters involving large amounts of high-value assets can be complicated. First, the court must determine which assets are marital and which are non-marital. Additionally, the court must determine the value of each of the assets. This latter requirement was a main focus in this divorce, with “appraisers and accountants try[ing] to sort out the complexities,” the Post reported.

Sometimes, litigating a divorce action can be expensive. In addition to your legal team’s hours spent litigating your case on your behalf, you may also need other experts, like forensic accountants, working on your case. Even if you have substantial wealth, obtaining the liquid assets needed to pay these bills can be complicated. In some cases, resolving this problem may mean selling a major asset. However, once the asset sells, how should the sale proceeds be divided? A recent case originating from Palm Beach County addressed this issue.

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In a high-asset divorce case in Florida, there are lots of efforts that go into determining the outcome. There’s collecting and developing relevant factual evidence that demonstrates the strength of your arguments. There is also knowledge of procedural rules and an understanding of how to use them to your most beneficial effect. In a recent Miami case, a husband’s well-timed dismissal motion proved critical in allowing him to avoid the imposition of a substantial alimony obligation.

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A recent decision issued by the Fourth District Court of Appeal regarding the proper amount of child support to be paid by a father who made roughly $2 million annually addressed a sometimes challenging issue for the courts:  how to calculate the proper amount of child support for the children of an extremely high-income parent. In this case, the appeals court upheld the lower court’s decision to follow the child support guidelines, leaving in place an order that demanded a monthly child support payment of nearly $9,000.

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The breakup of a for-profit medical school founder’s 50-plus-year marriage helped fuel a multitude of legal actions, with the founder’s wife seeking to freeze the assets of the university through the equitable distribution process, while the husband accused the wife of abusing the legal process to tie up money that belonged to the school and other companies. A Florida court recently ruled against the wife, ordering her to pay roughly $6.8 million in damages for wrongfully seeking and obtaining an injunction that froze nearly $100 million in assets, as dailybusinessreview.com reported.

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