Generally, a high-net-worth divorce is a divorce where a couple has a high gross annual income beginning at, for example, at one million dollars and increase exponentially. These couples typically have a large financial portfolio and multiple streams of income contributing to individual and combined net worth. These individuals bring complex issues like complex asset division, hidden finances, and even premarital property ownership. All of these roadblocks are hard for individuals but become easier to navigate with professional help.
While each state has unique rules and regulations when it comes to the division of finances and property, Michigan is considered an equitable allocation state, meaning the court will attempt to split the division of finances, assets, and property equally, but don’t always reach a true 50/50 division. Most courts do not have the time or ability to sort out issues such as real property, pre-marital assets, co-mingled funds, business interests and so on without a litigant (through counsel or otherwise) presenting them with a summary of the disputed issues and a summary of the specific property involved.
There are significant hurdles to navigate in the process of separation and ultimately divorce, including the following:
Divorces involving substantial assets require a professional approach to ensure that
both parties get a fair share of the pie. Highly complex assets such as retirement
accounts, closely held business interests, and investments can complicate matters.
For this reason, many high-asset couples in Grand Rapids turn to dedicated divorce attorneys for guidance – experience with such cases means they know what questions
to ask and how to anticipate potential legal implications of any decisions made now or in the future.
For high-net-worth couples, addressing the property rights at stake in a divorce can be an incredibly daunting ordeal. When determining who gets what, it can be easier for couples to decide with professional legal assistance.
While no divorces are precisely alike, situations like ownership claims over stocks and businesses or vacation homes are common for high-net-worth couples. Our team considers each case carefully and works with our clients to maintain an open dialogue as they decide which assets should remain exclusive and which should be divided. We help our clients identify, strategize, and execute plans to protect their best interests – one of the most critical steps for achieving a positive outcome from the divorce process.
Below are common unique considerations for high-net-worth couples during a divorce concerning property division:
During the divorce process, spouses must determine which assets may be marital property and which are separate assets. Assets acquired during the marriage and accumulated or associated debts are typically seen as marital property and thus subject to division between the parties according to the division system governed by Michigan law. On the other hand, assets acquired before marriage, or assets received by one spouse through inheritance or gift, may not be eligible for division. However, non-marital property may be commingled and lose its separate characterization for purposes of a divorce.
Divorcing couples in Michigan with retirement plans must ensure the property division process is adequately addressed with legal representation. While there are many types of retirement plans, including 401(k)s, 403(b)s, pensions, IRAs, and Thrift Savings Plans (TSPs), it’s essential to recognize that only marital property is eligible for division. Some of your retirement savings may have been added before the marriage, making said contributions non-marital and no longer subject to division in the divorce.
Michigan case law on marital property looks at stock options granted during the marriage as marital property because they have a contractual value at the time of the divorce filing. The burden of proof lies on the employee spouse to prove which options are non-marital. The key for any divorcing spouse is to determine what the value of stock options are, which is where our firm’s trusted partners and expert witnesses come in to assist the client in this valuation.
Dividing assets is difficult for couples and only more complicated for high-net-worth couples who co-own businesses. In an Michigan divorce, both parties have a variety of options to consider when it comes to dividing the company’s assets. Some couples opt to assign the business to one partner while awarding properties of a similar value to the other. Opting to appoint the formerly shared company to one partner with conditions can be beneficial if both parties agree that this would lead to a fair division and can minimize tax implications and expenses.
On the other hand, divorcing spouses can also decide to divide each asset equitably or sell the business altogether and split the earnings. Although conceptually simple, some nuances exist in business partners divorcing that an experienced divorce attorney will be able to assist you with investigating.
Do you and your former spouse have an extensive real estate portfolio? Today many couples co-own rental properties, commercial buildings, vacation property and homes and leverage the profits as investments. When dividing investment property among spouses during a divorce, the most desirable options for most couples involve mutually agreeing on one of the first two options: selling the property and dividing the profits or making an offer to buy out the other spouse’s interest in the property. To do that, often two strategy’s are employed: (1) use of appraisers, or (2) use of market valuation on said property. Sometimes, where an attorney adds value is the legal position that combines both valuation methods to argue for the accurate value given the very volatile property market in Michigan right now.
Property and complex asset division are unique considerations in a high-asset divorce, but there are other factors that couples must face during a divorce or separation. High-asset divorces are generally defined as those between couples with a large amount of money and property to split.
Such cases also involve:
Often it requires an experienced family law attorney with an established network to apply critical legal strategies that can protect your rights during a high-asset divorce. When faced with this kind of conflict, it’s essential to remain informed on the distinctions between traditional and high-asset divorces to understand the potential implications.
Other considerations with similar applications in traditional divorces include child and spousal support and parenting time. While specific financial concerns are made in high-asset divorces, a divorce attorney and Michigan court systems will provide the same factors in determining an outcome for support and parenting time.
In a traditional divorce, spousal support and parenting time are two common and often contentious factors. The best interests of the child or children should always be considered at the forefront of any case. The court uses a framework termed the 12 best interest factors which it uses to determine which parent is best suited to have primary physical and/or legal custody of the child or children (MCL 722.23). Each factor is evaluated and one or the other, or at times both, of the parents is “favored” for that factor. The sum of the 12 factors is given significant weight in determining custody.
In addition, the state of Michigan has implemented a unique child support framework referred to as the “support and parenting time” enforcement act. The new model is based upon the widely accepted theory that all costs incurred regarding rearing a child should be distributed between both parents. With this approach, both parent’s income, daycare costs, health insurance, tax dependents, overnights with the minor child(ren) and other factors are entered into a formula (using a guidelines program such as the “Prognosticator”) which results in a “Michigan Child Support Guideline.” Said “guideline is used to determine the amount of support paid by or due to each party. With this approach, the court determines an amount of child support due and indicates from which party the payment will be made. The child support guideline also determines how the uninsured medical expenses will be divided between the parties (for example40/60). The child support guideline is highly dependent on a party’s overnights with the minor child(ren).
In Michigan, spousal support is determined on a case-by-case basis in accordance with the judges’ discretion on 14 factors as spelled out in Loutts v Loutts, 298 Mich App 21, 31, 826 NW2d 152 (2012). Each case involves show that there is insufficient assets or property for the suitable support and maintenance of a party (MCL 522.23(1) and an evaluation of 14 factors in Loutts surrounding the marriage that relate to the economic needs of both spouses after divorce. These factors include each spouse’s age, physical and mental condition, and earning capacity; conduct during the marriage; duration of the marriage; how assets were divided; and more.
By weighing each factor carefully, the court eventually comes to a ruling regarding spousal support obligations. This ruling may be modified depending on circumstances such as substantial changes in either party’s ability to pay or changes in living arrangements, remarriage, etc. In any event, understanding the existing legal framework can go a long way towards negotiating necessary spousal support agreements successfully.
If you have questions about child custody, child support or spousal support, you must contact an Michigan divorce attorney to review the intricate details of your complex divorce. Exploring all possible options with an expert will significantly impact the outcome of your case.
Michigan joined the majority of states in granting children a right to enjoy time with both parents, even when not living with them. A child’s bond with both parents is critical for their physical, mental, and emotional well-being. As such, parenting time is granted unless clear and convincing evidence indicates that visitation would be detrimental to the child’s health. MCL 722.27a (3). It is important for courts to consider this law when deciding the best interests of the child.
In making an initial custody determination, the Trial Court is governed by the Child Custody Act. MCL 722.27(1)(c) provides that:
The court shall not modify or amend its previous judgments or orders or issue a new order so as to change the established custodial environment of a child unless there is presented clear and convincing evidence that it is in the best interest of the child. … (Emphasis added)
Whether an established custodial environment exists is a preliminary and essential determination. In adopting MCL 722.27(1)(c), the Legislature intended to “minimize the prospect of unwarranted and disruptive change of custody orders and to erect a barrier against removal of a child from an ‘established custodial environment,’ except in the most compelling cases.” Baker v Baker, 411 Mich 567, 576- 577; 309 NW2d 532 (1981). Once the trial court makes findings on the record on whether an established custodial environment exists and determines the appropriate burden of proof, it must then apply that burden to the best interest factors. The trial court will then consider parenting time and custody based on the “12 best interest factors” contained in MCL 722.23.
The trial court may also consider the parenting time factors to determine the frequency and type of parenting time to award. Those factors are contained in MCL 722.27a(7) and are the following:
(a) The existence of any special circumstances or needs of the child.
(b) Whether the child is a nursing child less than 6 months of age, or less than 1 year of age if the child receives substantial nutrition through nursing.
(c) The reasonable likelihood of abuse or neglect of the child during parenting time.
(d) The reasonable likelihood of abuse of a parent resulting from the exercise of parenting time.
(e) The inconvenience to, and burdensome impact or effect on, the child of traveling for purposes of parenting time.
(f) Whether a parent can reasonably be expected to exercise parenting time in accordance with the court order.
(g) Whether a parent has frequently failed to exercise reasonable parenting time.
(h) The threatened or actual detention of the child with the intent to retain or conceal the child from the other parent or from a third person who has legal custody. A custodial parent’s temporary residence with the child in a domestic violence shelter shall not be construed as evidence of the custodial parent’s intent to retain or conceal the child from the other parent.
(i) Any other relevant factors.
While it is ideal for divorcing couples to come together and share decision-making responsibilities regarding their children, issues may arise. When parents cannot agree on key aspects of their child’s upbringing, it falls on the court to make decisions to ensure the best mentorship and environment for their growth.
Once parenting time is established, it will be reduced to writing in a temporary or final order of custody, parenting time, and support. An experienced attorney by your side during these difficult and complex decisions will dramatically improve your prospects for desired parenting time. Contact the attorneys at Van Den Heuvel Law Office to schedule your consultation.
Divorce can be a trying time for those involved, sometimes even more distressing if the couple has problems that increase conflict. With the power of social media and easy online searches, publicly sharing personal details or false accusations can have an irreversible devastating effect, damaging a person’s reputation. Protecting a client’s reputation is especially important for the wealthy or famous since the media and the public highly scrutinize such relationships. More often than not, during a divorce between individuals of greater community or online visibility, all the dirty details will spill out into the open.
A divorce shouldn’t be harder for a couple or individual because of wealth or social status. Our Van Den Heuvel Law Office team is dedicated to protecting your reputation, business, and community standing during this difficult time. Lawyers assigned to a case for high-net-worth or complex clients can provide reputation management for their clients to ensure privacy is honored and manage PR where needed.
At Van Den Heuvel Law Office, we take great pride in bringing decades of experience to the table when representing spouses in complex and high-asset divorces. Our Grand Rapids-based team of high-asset divorce attorneys have a thorough knowledge and understanding of the complex legal issues involved in these cases and considerable expertise in negotiating complicated settlements. We always strive to keep settlements amicable and will not hesitate to use mediation when necessary. We are also determined and effective litigators who will go above and beyond to ensure our clients’ parenting time and desired property rights are upheld inside and outside of court.
By engaging an experienced attorney from the start, you’ll have peace of mind knowing you have done what you can to put yourself in a strong position now and later on.
At Van Den Heuvel Law Office, we recognize that the dissolution of marriages with high net worth presents its questions and challenges. Our attorneys’ decades of experience provide reassurance during difficult times and allow us to protect our client’s interests while seeking an equitable settlement. With complex property division, parenting time arrangements, and other factors unique to the situation, the highest level of attention and care should be involved throughout the process.
Our attorneys at Van Den Heuvel Law Office have decades of experience dealing with high-asset divorces and know how to navigate every facet of a case. Contact us today or book an appointment for an after-hours consultation over Skype if you wish to discuss your legal concerns and receive expert guidance about the best course of action for your particular situation.
To talk with our attorney about your legal concerns, contact the Van Den Heuvel Law Office by calling 616-698-0000. You may also complete our online contact form. After-hours consultations are available by appointment. We are also available on Skype by appointment.