Suppose you or your spouse is an executive in a company, professional practice, partnership, or other organization. In that case, you may face additional concerns in identifying all the components of income and/or dividing your marital property.
Many executives receive certain bonuses, commission payments, profit shares, stock options, or other perks, either in place of or in addition to a salary or base pay. Such additional compensation and benefits enhance income and the marital estate and will be relevant in divorce. It is important that such benefits not be overlooked. However, it is equally important to distinguish between items that may be classified as property, items that may represent elements of income, and potential future entitlements which are too remote or uncertain about falling into either category presently.
In these cases, there is often a greater level of complexity than in other divorces. The stakes are also generally much higher. As a result, it is important to be prepared for what to expect before, during, and after a high net worth divorce in Denver. For help, contact our firm today to schedule a consultation.
Denver High Net Worth Divorce Attorney Quick Links
- Most Common Denver High Net Worth Divorce Issues
- Protecting Your Assets in a Denver High Net Worth Divorce
- How Assets Are Divided in Denver High Net Worth Divorces
- Separate Assets in Denver High Net Worth Divorces
- Hiding Assets in Denver High Net Worth Divorces
- Putting A Value On Perks And Special Compensation
- How Do Special Company Benefits Factor In My Divorce?
- Spousal Maintenance in Denver High Net Worth Divorces
- Why Hire Hogan Omidi, PC, For Your Denver High Net Worth Divorce Case?
Most Common Denver High Net Worth Divorce Issues
No two divorces are alike, but there are certainly some common threads that run through many high net worth divorces. Here are four of the most common issues that arise during these types of proceedings.
1. Child Custody and Support
In any divorce involving children, child custody and support will be major concerns. High net worth individuals often have the financial means to provide their children with a very comfortable lifestyle, but may be hesitant to provide too much, as it could affect their own lifestyle. Conversely, the non-wealthy spouse may feel entitled to a larger share of the assets in order to provide their children with a similar lifestyle. Our child custody attorneys in Denver know how custody battles can sometimes get ugly, but it’s important to remember that the needs of the children should always come first. With the help of a qualified Denver family law attorney, you can ensure that your children’s best interests are being taken into account in your child custody and child support case.
2. Spousal Maintenance
Alimony, or spousal maintenance, is usually one of the most controversial aspects of a high net worth divorce. The amount of alimony paid can have a significant impact on each spouse’s standard of living after the divorce, so it’s important to get it right. If you’re facing a high net worth divorce, it’s essential to have an experienced high net worth divorce lawyer on your side who can advocate for your interests and help you reach a fair settlement while negotiating spousal support.
3. Division of Property and Assets
Another complex aspect of any divorce is dividing up the property and assets acquired during the marriage. Our experienced Denver property division lawyers know this can be especially difficult in a high net worth divorce, where there may be significant assets in the marital estate at stake.
4. Business Valuation and Division
A business valuation is typically required to determine the fair market value of a business owned by one or both spouses in a high net worth divorce. The property division process can be complicated, so it’s important to have an experienced business valuation expert on your team. Once the business has been valued, a method must be devised to compensate the non-owner spouse for a share of that value without undermining the continued success of the business
Protecting Your Assets in a Denver High Net Worth Divorce
No one gets married expecting to get divorced, but unfortunately, it happens. If you find yourself in the position of going through a high net worth divorce, there are some special considerations you need to take into account to protect your assets. Here are a few tips to help you safeguard what’s yours.
Hire the Right Team
When it comes to high net worth divorce, you will want to make sure that you have the best team possible working on your case. This includes finding an experienced Denver high net worth divorce attorney who has handled cases like yours before. You will also want to find a financial expert who can help you determine the value of your assets and liabilities. Lastly, you may want to consider hiring a therapist or counselor to help you through this difficult time.
Keep Good Records
If you want to keep what’s rightfully yours, you need to be able to prove you’re entitled to it. Gather all the financial documents related to your assets, including bank statements, tax returns, and mortgage paperwork. The more documentation you have, the better.
Stay Involved in The Process
Don’t just hand everything over to your attorney and trust that they will take care of it. It’s important that you stay involved in the process and understand what’s happening every step of the way. This way, you can make informed decisions about how to protect your interests best.
Be Prepared For a Fight
Unfortunately, not all divorces are amicable. Be prepared for a fight if you’re dealing with a contentious divorce. It’s important to have realistic expectations and to understand that the process can be emotionally draining. But if you stick to your guns and hire a strong team of Denver divorce attorneys specializing in high net worth divorces, you stand a good chance of coming out on top.
How Assets Are Divided in Denver High Net Worth Divorces
In Colorado, all marital property is subject to equitable distribution. This means that the court will divide the property in a way that is fair, but not necessarily equal.
The court will consider several factors when determining how to divide the property, including:
- The length of the marriage
- The financial needs of each spouse
- The earning potential of each spouse
- The contribution of each spouse to the marriage
- The custody arrangement of any children from the marriage
Based on these factors, and others, the court will decide what is fair and equitable. Marital fault or wrongdoing in the marriage is not a consideration when dividing marital property.
Separate Assets in Denver High Net Worth Divorces
While marital property is divided equitably, separate property is typically excluded from division by the court. Separate property is property owned by one spouse alone and may include:
- Gifts or inheritance given solely to one spouse;
- Assets set apart by a prenuptial or postnuptial agreement; and
- Property acquired by a spouse prior to marriage.
Separate property remains separate property until a spouse gifts that property to the marriage or commingles the asset with marital property in such a way that its origins become untraceable. When a non-owner spouse’s efforts increase the value of the separate property, any appreciation in value is marital property.
When making a final property division, the court will consider increases and decreases in the value of separate property during the marriage as well as the depletion of separate property for marital purposes.
Hiding Assets in Denver High Net Worth Divorces
Colorado requires divorcing spouses to complete a sworn financial statement within 42 days of the divorce filing. The financial statement includes a section for disclosures and an additional discovery allowance so the other spouse can search for undisclosed assets.
Colorado mandates divorcing spouses fully and honestly disclose the following information on their financial statement:
- Marital and separate assets;
- Marital and separate debts;
- All sources of income; and
- Monthly expenses.
The financial statement is signed under penalty of perjury. Spouses found guilty of hiding assets in Colorado may be held in contempt of court and sentenced to jail time or face other civil penalties.
There is a five-year lookback period in Colorado pertaining to undisclosed assets. A spouse who fails to disclose an asset or drastically misrepresents an asset’s value is subject to a revision of property division up to five years after their divorce decree.
Putting A Value On Perks And Special Compensation
At Hogan Omidi, PC, our Denver high net worth divorce lawyers understand how these issues factor into a high-asset divorce. We have guided hundreds of executives and professionals, as well as spouses of executives and professionals, in the Denver metro area and throughout Colorado through their divorces.
Our attorneys have experience dealing with the unusual elements of income or assets of business executives, professionals, and business owners, including:
- Company stock
- Stock options, restricted stock, stock appreciation rights, and other stock-based grants
- “Golden parachute” payouts or benefits
- Signing bonuses
- Retention or productivity bonuses
- Car, phone, or travel allowances
- Vacation plans or allowances
- Severance agreements
- Noncompete clauses and employment contracts
Many executives and professionals have agreements with their companies or partnerships for when they retire or leave the company. Even if this has not happened yet, and will not happen for a while, we must gauge the value of these agreements in your current situation.
How Do Special Company Benefits Factor In My Divorce?
The types of benefits or perks mentioned above may have potential value. They may be treated as assets or incorporated into the income of the person receiving them. For the Executive or business owner, it is important to ensure that such items are not improperly double-counted both as an asset and as an element of income. It is also important to ensure that items not certain to be received are not treated in the same fashion as present entitlements.
Some extras may also affect the income figure for a Denver spousal support attorney calculating alimony or child support. It is important to work with a specialized child support lawyer in Denver who can guard against having the same benefit treated as an asset and an element of income.
Our Denver family law attorneys deal with these unique situations as they arise in your divorce proceedings. We may be able to use some of these issues in negotiations with your spouse and their attorney. We will review your financial situation and that of your spouse and advise you on how to proceed.
Spousal Maintenance in Denver High Net Worth Divorces
Spousal maintenance, or alimony, in Colorado, is financial support paid by one spouse to the lesser-earning spouse and is typically based on financial need. Colorado has spousal maintenance guidelines to assist the court in determining support terms and amounts for spouses who earn less than $240,000 per year combined.
Spouses whose incomes exceed $240,000 per year fall outside of the guidelines making any support determination more complex. When the guidelines do not apply, the court may consider any factor it deems relevant when making a spousal maintenance decision including but not limited to the following:
- The financial resources of the recipient spouse, including the actual or potential income from separate or marital property or any other source and the ability of the recipient spouse to meet his or her needs independently;
- The financial resources of the payor spouse, including the actual or potential income from separate or marital property or any other source and the ability of the payor spouse to meet his or her reasonable needs while paying maintenance;
- The lifestyle during the marriage;
- The distribution of marital property, including whether additional marital property may be awarded to reduce or alleviate the need for maintenance;
- Both parties’ income, employment, and employability, obtainable through reasonable diligence and additional training or education, if necessary, and any necessary reduction in employment due to the needs of an unemancipated child of the marriage or the circumstances of the parties;
- Whether one party has historically earned higher or lower income than the income reflected at the time of permanent orders and the duration and consistency of income from overtime or secondary employment;
- The duration of the marriage;
- The amount of temporary maintenance and the number of months that temporary maintenance was paid to the recipient spouse;
- The age and health of the parties, including consideration of significant health care needs or uninsured or unreimbursed health care expenses;
- Significant economic or noneconomic contribution to the marriage or to the economic, educational, or occupational advancement of a party, including but not limited to completing an education or job training, payment by one spouse of the other spouse’s separate debts, or enhancement of the other spouse’s personal or real property;
- Whether the circumstances of the parties at the time of permanent orders warrant the award of a nominal amount of maintenance to preserve a claim of maintenance in the future; and
- Whether the maintenance is deductible for federal income tax purposes by the payor and taxable income to the recipient, and any adjustments to the amount of maintenance to equitably allocate the tax burden between the parties.
The court will address property division before spousal maintenance. In a high net worth divorce, this could make a spousal support award nominal or unnecessary.
The court will also consider any tax implications of spousal maintenance as it is no longer taxable income to the recipient or nor is it deductible for the payor.
Why Hire Hogan Omidi, PC, For Your Denver High Net Worth Divorce Case?
High net worth divorces are often complex with difficult proceedings. However, by being prepared for what to expect and by working with the right team, you can make the process as smooth as possible. You should work with us for the following reasons:
We literally wrote the book on Colorado divorces.
Our partner wrote the reference book on Colorado family law that most attorneys, judges, and others use. This means that we have a deep understanding of the law and how it applies to divorce cases in our state. We can explain exactly how the law will affect you during and after your divorce, so you can make the best possible decisions for yourself and your family.
Our Denver high net worth divorce attorneys approach every case with sensitivity and compassion for your situation.
We understand that going through a divorce is a difficult and emotional time for our clients. Our attorneys approach every case with sensitivity and compassion for your situation. We will take the time to listen to your story and help you navigate this tough time in your life.
Contact us today to schedule a consultation.