How Can You Negotiate a High-Net-Worth Divorce Settlement?
High-net-worth divorces in California generally mean you and your spouse own over $1 million in assets, but there is no official legal definition.
Regardless, there is much at stake when dividing property and assets. You will need to retain an experienced family law attorney who can effectively handle these types of divorces.
Divorcing couples will often decide to negotiate a marital settlement agreement instead of a public battle in a California family court. An agreement to settle means you and your spouse make all the crucial decisions regarding the divorce.
In other words, it prevents a stranger (a judge) who knows nothing about you from making life-altering decisions for your family. It's also much faster and less expensive. Litigation in court does not always turn out as expected.
The divorce settlement negotiations in high-net-worth couples are crucial for their financial future. More importantly, if there are issues over child custody and support, you can set the terms in the agreement.
When entering negotiations with your spouse and their lawyer, you must come to the table with a strategic plan.
The issues to negotiate are similar to traditional divorces, such as child custody, child support, spousal support, and property division. However, the distinguishing factor in high-net-worth divorces is the significant assets that must be divided equally.
For example, in high-net-worth divorces, spouses often own multiple properties, vacation homes, investment properties, a high-profit business, and substantial stock investments. High-net-worth spousal support is based on different factors. Let's review this topic more closely below.
What About a Portfolio of Complex Assets?
Many business professionals will have a portfolio of complex assets. This means they have much at stake because California is a community property state, meaning marital property must be split equally.
Put simply, you will need California family attorneys specializing in high-net-worth asset divorce that involve:
- Business valuation experts,
- Forensic accountants,
- Professional investigators,
- Expert property appraisers,
- Company stock valuation,
- Investment portfolio valuation.
After successful negotiations, you and your spouse will sign a property settlement agreement.
You will also negotiate a child custody and support settlement agreement when kids are involved. Next, their lawyers will file the agreements in a family court to finalize the divorce.
How Should You Prepare for Negotiations?
Many negotiations in high-net-worth cases have a similar pattern to a traditional divorce.
You will first meet with your family law attorney to review goals always protected by the attorney-client privilege.
Your family law professionals will communicate with your spouse's attorney to review what you're seeking in the divorce.
In high-net-worth divorces, settlement negotiations frequently require several meetings and phone calls to resolve all the divorce issues. Not all high-net-worth divorces always have to be a hotly debated battle
Remaining on civil and friendly terms with your spouse benefits everyone involved. Maintaining emotions during divorce proceedings is often crucial to the success of negotiations.
Preparation for the negotiations is an essential part of the process as there is much at stake, such as:
- Where you and your children will live,
- Resolve any spousal support issues,
- How assets and property are divided,
- Who will own and operate the family business
Since divorce is often an emotional roller coaster, you should let your family law specialist handle the details.
What Financial Information Will You Need?
You need to know your goals and specific financial information when you negotiate. Gathering the necessary documents early in the process will give you a better idea of the situation, such as:
- Income and expenses,
- Assets and debts,
- Properties and businesses owned.
Your spouse will also have to provide you with this information. Under California Law, this type of financial information must be exchanged and called a declaration of disclosure.
In the all-too-common situation where you have reason to believe that your spouse is concealing income or assets, you might need a forensic accounting investigation.
What About Bargaining?
All marital settlement negotiations aim to resolve how to divide assets and property.
The term “divorce,” by its very nature, is a series of compromises. Thus, sitting down at the negotiating table with a hardline approach will typically fail in the end.
In other words, you should only expect to receive some of what you want. You should have a priority list of what is the most important. Keep long-term goals in mind, as you will most likely share custody of the children.
Remember, if you can't compromise with your spouse, you force the court to intervene and make the decisions.
Yes, there are situations where your spouse can't reach an agreement on crucial issues. Perhaps one spouse is not acting in good faith negotiations, and litigation is the only option.
What Are Some Negotiating Tips?
All high-net-worth divorce settlement negotiations are unique, but there are some practical tips you can follow that could help you, such as:
- Your children are always the top priority in negotiations,
- Open communication between spouses and lawyers,
- Don't take an aggressive hardline approach,
- You will have to make compromises,
- Make an effort to understand California family laws,
- Focus on “big-picture” issues,
- Remain calm regardless of what is negotiated,
- Be respectful in all situations,
- Don't feel pressure to make an instant decision.
A successful high-net-worth divorce settlement usually means you will only get some of what you want.
Still, the only other option is a protracted and expensive family court litigation with no guaranteed outcomes.
Retaining the right California family law lawyer is often the key to successful negotiations.
Let's be realistic. Divorce is not easy, but proper planning and a strategy can be less stressful. The future of your family depends on negotiations. Your attorneys must know how to handle these sensitive and discreet issues.
Furman & Zavatsky are Los Angeles-based divorce and family law lawyers providing legal representation across California. Contact our law firm via phone or fill out the contact form for a free case evaluation.