Complex divorces, which usually include most high asset divorces, are especially difficult. We have set forth some of the areas where high asset divorce can be highly contentious.
1: Child Support
Florida Statute, Section 61.30(6) determines the presumptive minimal support obligation based on income as set forth in the Child Support Guidelines However if the court finds the amount to be unjust or inappropriate based on statutory factors it can be reduced by 5%. Fla. Stat. § 61.30(1)(a); see Finley v. Scott, 707 So. 2d 1112 (Fla. 1998). Subsection (11)(a) of Fla. Stat. § 61.30 also permits a court to make an equitable adjustment of the minimum child support obligation based on a list of factors. But the Court must make written findings explaining why ordering payment of such Guidelines amount would be unjust or inappropriate. In a high-income household, a party might have to retain either a forensic accountant or other qualified financial experts to provide the court an expert opinion regarding the financial needs of the child(ren) and the financial circumstances of the parties.
2: Shared Parental Responsibility
The primary concern of the Florida Courts in custody cases is the best interests of the child(ren). Florida has adopted the Uniform Child Custody Jurisdiction and Enforcement Act. Under this Statute, the term “custody” is avoided. Instead the terms “shared parental responsibility” or “majority time-sharing”. Visitation is now thought of as “parenting time”.
3: Spousal Support/Alimony
This is an area of law where high assets make all the difference. In Florida, it also may be known as maintenance. Under Florida law, alimony is granted to a spouse and it can be awarded to bridge the gap, be rehabilitative, that is, to get the person to a position where he or she can take care of expenses without assistance, durational, or permanent.
Alimony in Florida is calculated based upon the need and ability to pay. The American Association of Matrimonial Lawyers provides a guideline, which takes 30% of the payer’s gross annual income minus 20% of the payee’s gross annual income to estimate the alimony.
Alimony is calculated by the payee’s total income including alimony not to exceed 40% of the combined gross income of the parties.
You should be married at least 7 years for a decent alimony claim, but the law provides exceptions: Short-term less than 7 years, Moderate-term more than 7 years, but less than 17 years, and Long-term, 17 years or more.
There are four kinds of alimony, Temporary (during court proceedings), Bridge-the-Gap Alimony which is basically transitional, Rehabilitative, to help the spouse obtain education and skills necessary to become independent, Durational alimony, awarded in the instance of a short or moderate-term marriage, Permanent alimony, for a spouse of moderate and long-term marriages.
Bridge-the-gap, durational, and permanent alimony ends upon the death of either the paying or the receiving spouse. Upon remarriage of the receiving spouse, alimony is terminated. However, this does not apply to rehabilitative alimony.
4: Property Division
Florida is an “Equitable Distribution state and not a community property state. This means that marital property, assets, and liabilities acquired during the marriage with marital funds or labor, will be divided equally upon divorce in most instances. The non-marital property of each party remains with the spouse that owns that particular property.
A court won’t order a couple to split a marital home, but a judge may award one spouse the home in exchange for buying out the other spouse’s share of the home.
In other cases, a judge may order the couple to sell the home and divide the proceeds.
In dividing up the marital property, the court is expected to be guided by principles of equity, making sure that the marital property division treats both spouses in a fair (but not necessarily in an exactly similar) manner. This includes property acquired during the marriage and the enhancement in value and appreciation of non-marital assets.
Many people involved in divorce either own a business or have a spouse that is a business owner. The business could be of any size or type so that the valuation could be complex and challenging. Proper evaluation and understanding of the business is difficult, and improper strategy can result in an unfair division of business assets.
Setting the value of a business is difficult. The most common way is to retain a forensic CPA that has experience in business valuation. There are other organizations that provide valuation training and accreditation to business valuation specialists including:
Businesses are either valued as ongoing or based on the liquidation value. If the business is ongoing, there are three basic approaches utilized by experts to value a business: Income-based approach, Asset-based approach, and Market-based approach. It is advisable to retain an attorney who is familiar with the business. It should also be noted that your approach and strategy will be determined by your position, whether you are an owner spouse or a non-owner spouse or employee. Experienced counsel will be extremely helpful.
It is important to remember that your investments don’t have to be left to the mercy of a Florida court during your divorce. You and your spouse may negotiate your own settlement agreement, dividing marital assets in ways that work best for you.
Any appreciation of your investments, as well as any income generated by those investments, could become a marital asset if that growth or income occurred while you were married. Spouses will probably have a Qualified Domestic Relations Order (QDRO) during the divorce if either spouse has pensions or other employer retirement accounts. A QDRO orders the plan administrator to pay the non-employee spouse the amount set forth by the court order or settlement agreement.
If a QDRO is not properly prepared, there can be significant tax consequences. Retirement assets that are not in an employer plan such as IRAs, will require a change of ownership documents. When a couple has been married at least ten years, the spouse married to a spouse who paid into the system could qualify to receive spousal Social Security benefits. All financial investment accounts and insurance policies must be checked to ensure the beneficiary is updated following the divorce.
You may receive a statement which tells you how much your investments are worth, however, this may not be the same as the amount you would receive if you cashed in or transferred those investments. The value could be the transfer value or the surrender value, therefore you may have to ask the investment company for an up-to-date valuation, transfer, or surrender value.
Typically, those marital investment assets subject to distribution are valued as of the date of filing of the divorce petition. If there is a significant increase or decrease in the value of the asset between the filing of the divorce and the completion of the divorce, that gain or loss is realized by both parties at the time of the actual distribution or sale of the investment. Don’t forget to address tax issues if you do negotiate your own agreement. If an exchange is in accordance with the terms of your marital settlement agreement.
Of course, every divorce is unique and may involve many other issues other than the examples we have presented in this article.
If you are contemplating a break-up, the Brodie Friedman legal team provides clients with exceptional advice and personalized attention, by making your case our immediate priority. If you’re in need of excellent legal representation our team is ready to help.
With over 30 years of combined experience, Jason Brodie Esq. and Joshua Friedman Esq. will guide you toward realistic goals and provide committed advocacy toward achieving them. They are known throughout South Florida for dedicated client service, tenacity, and success in complex divorce litigation involving property division, child custody, and spousal support.
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