Tag Archive for: high-asset divorce

Baby boomer splits — known as gray divorces — on the rise

Actors Danny DeVito and Rhea Perlman recently announced they are parting ways after a 30-year marriage. While the announcement surprised some, research by Bowling Green State University suggests the couple’s split may be part of a growing trend. Over the last 20 years, the divorce rate for couples age 50 and over has increased more than 100 percent. Experts say a number of factors are leading to the increase in these so-called gray divorces.

While older couples divorce for many of the same reasons as younger couples — infidelity, for example — other factors come into play as a couple ages. By the time a couple reaches age 50, their children often are grown. When they no longer have the joint goal of raising a family, a couple may find they no longer share common values and interests. Unlike their parents and grandparents who often married because society expected them to, baby boomers married for personal fulfillment. Once they realize the marriage no longer makes them happy, they are less inclined to stay.

Another factor in gray divorces is the increased economic independence of women over age 50. A woman who has been in the workforce for a number of years has sufficient resources to support herself. She is not afraid to leave an unhappy marriage.

Divorce at any age is difficult. While empty nesters may not have child support and custody issues, property division often is more complicated because of the large number of assets a couple has acquired over time. A high-asset divorce requires valuation of things like business interests, pensions and second homes. An experienced divorce attorney can aid in this process.

Source: CBS This Morning, “‘Gray divorces’ increasing sharply,” Oct. 13, 2012

Hidden assets in divorce proceedings

As many Wisconsin residents have discovered, any divorce has the potential to be a complicated affair. That being said, the diversity of possible complications often increases during a high asset divorce simply because of the range of assets these situations often involve. In these cases, one of the primary difficulties a divorcing party may encounter lies simply in the act of forcing a complete disclosure of the other’s assets and liabilities, particularly due to some people’s proclivity for hiding such things about themselves.

According to one divorce mediator from the Institute for Divorce Financial Analysts, complete disclosures are a necessary component in attaining an equitable settlement. Sometimes divorce members try to hide assets using offshore accounts or other such matters, but they can also be something as seemingly benign as a recent loan made to a family member. In addition, many assets can be hard to quantify – consider, for example, the difficulties posed by attempting to designate ownership of a stock that was jointly owned during marriage.

While such issues may seem irrelevant to some, they do not necessarily pertain only to high asset divorces; things like basic 401(k)s and individual retirement accounts can also be on the table in cases where both spouses contributed to their maintenance over time. If a former partner has failed to disclose the extent of his or her asset portfolio, it may do a disservice to the other and prevent them from receiving what is rightfully theirs.

Whether the divorce is high asset or not, someone involved in one who suspects that their spouse has not been entirely forthcoming about their financial situation may wish to have the matter investigated more thoroughly. A divorce attorney may help clients get their fair share of the marital property.

Source: Financial Planning, “Finding Hidden Assets: Digging Deep in HNW Divorce”, Andrew Pavia, March 24, 2014

Couple who divided house with makeshift wall officially divorced

Marital property division can be one of the most complex issues in a divorce. Property division can be especially complex when the spouses have been married a long time and have accumulated substantial assets together. A recent high assets divorce provides a rather stark example of how difficult dividing property can be.

The divorce began about six years ago. In 2005, the wife forced her husband out of their marital home. In August 2005, a family court judge ordered that the husband could move back into the house if he divided it into two units. This required constructing a physical wall in the house.

The wife appealed the 2005 court order requiring the wall. About one year later, an appeals court allowed the wall to be constructed. The wall divided their three-story dwelling by separating the first-story living room from the staircase leading upstairs. The wall went up in December 2006, and the couple has been living together, yet apart, since that time.

The divorce was then delayed due to a change in the law and a bankruptcy filing. Now, after five years, a judge gave his final ruling in the divorce case. The judge ordered that the couple sell the now divided house and two other properties and split the profits between the two spouses. In addition, the husband, the former owner of a factory, was ordered to pay the wife a lump sum of about $1.5 million plus $6,000 per month. However, he can keep several other buildings he owns.

The wife has indicated that she will appeal the judge’s ruling, which could delay the sale of the home indefinitely.

Source: NPR, “NYC Couple Who Split House With Wall Get Divorce,” 4/28/2011

Credit Suisse chief executive pegged with bloated interest bill

In a high asset divorce, the financial stakes are enormous and a few words in a settlement agreement can have a large impact. Recently, news broke that a forgetful moment coupled with a few words in a settlement agreement will cost Credit Suisse’s chief executive more than $750,000.

Brady W. Dougan, of the Swiss financial services company, missed the deadline for a divorce settlement payment by 12 days in 2006. An appeals court has now ruled that he will have to pay a whopping $750,000 in interest for being 12 days late. How did a 12-day late payment result in $750,000 in interest?

As part of Dougan’s 2005 divorce, Dougan needed to pay his ex-wife, Tomoko Hamada Dougan, a total of about $15.3 in two installments. Although Dougan made the first payment on time, he was late on the second $7.5 million payment by 12 days. Their divorce settlement agreement called for interest on any late payments, but the Dougans did not agree on the length of time the interest accrued.

Dougan and his legal team argued that he should only have tallied 12 days worth of interest, which equals the length of time he was late on the payment. After reviewing the exact language of the divorce settlement, the court determined Dougan was responsible for interest accumulated from the date of the settlement, not the date the second payment was due.

Because of the court’s ruling, Dougan is on the hook for one year and 12 days worth of interest, which came out just over the $750,000 mark. The court did not go easy on Dougan, who has degrees from the University of Chicago, saying that both he and his team were financially savvy enough to have recognized the consequences of a late payment.

Source: DealBook, “Credit Suisse Chief Penalized $750,000 in Divorce Case,” Kevin Roose, 27 June 2011

Danica Patrick announces divorce on Facebook

Celebrity NASCAR driver Danica Patrick recently announced on Facebook that she was divorcing her husband of seven years. While she said in her announcement that the split was amicable, Patrick — the most successful woman in American racing history — could still potentially face many of the challenges typical of a high asset divorce.

One issue frequently arising in high asset divorces is whether one spouse should be awarded spousal maintenance — generally known as alimony — from the other. Spousal support is designed to provide a non-working or under-employed spouse with assistance until that person becomes self-supporting. It often is a hotly contested issue in divorces, especially if one spouse earns a significant income. In Wisconsin, there are no set black and white rules to determine if, when, or how much spousal maintenance will be awarded. Courts will examine a number of factors when coming to a decision.

Another issue in high asset divorces is property division. In Wisconsin, the marital estate includes property that either spouse acquires during the marriage, with exceptions for gifts and inheritances. In most cases, the court divides the marital estate equally between the parties. In a high asset divorce, it is important to get comprehensive valuations of all marital property to ensure equitable division.

Patrick likely has a team of legal advisers who will help her work through these issues. Many people going through divorce might benefit from an experienced divorce attorney who can assist with these complicated legal issues.

Source: Associated Press, “Danica Patrick divorcing husband after 7 years,” Jenna Fryer, Nov. 20, 2012

Frank McCourt files for lower alimony payments

Any divorce has the potential to become a complex divorce. When there is a large amount of assets involved, the chances that the divorce will become complex increase. The divorce between Frank and Jamie McCourt is a good example of how this can happen.

In the latest round in the prolonged divorce contest between McCourts, Frank McCourt is disputing the amount of spousal support, or alimony, that he is required to pay. Frank McCourt argues that his wife is living extravagantly and that he cannot afford to continue funding her lifestyle while the divorce is finalized. Jamie McCourt contends that he is mismanaging his funds, and could sell his half of the Dodgers to cover costs of the divorce.

A previous court order mandated that Frank McCourt was to pay his ex-wife more than $600,000 per month, including $400,000 in payments on seven homes that are in her name. He would like these payments to be reduced.

The seven properties, which are all titled in Jamie McCourt’s name, are currently a major part of the divorce dispute. Jamie McCourt refuses to either sell or rent the properties, and Frank McCourt continues to have to pay the mortgages.

Because the Dodgers are also now in bankruptcy, Frank McCourt’s annual income has fallen to $5 million. His income does not cover the court-ordered payments to his ex-wife, and he has declared in filings that he has spent $8 million on support for Jamie McCourt in the last year, compared to about $600,000 on his own expenses.

Jamie McCourt questions Frank’s personal financial situation, contending that he is exaggerating any financial difficulties he may be having. She also questions Frank McCourt’s ability to run the Dodgers, whose value has significantly decreased in the last two years.

Frank McCourt’s motion to lower his payments to Jamie McCourt will be heard next month.

Source: ESPN, “Frank McCourt seeks reduced payments,” Josh Fisher, 15 July 2011