High Income/High Net Worth
While divorce involves couples all across the financial spectrum, high-income and high net worth divorces involve couples who have amassed significant wealth. These couples tend to have more contentious legal battles over assets. In such cases, it is not uncommon for disputes to arise in regards to multiple aspects of the division of property and the final divorce decree.
High net worth divorces may require the assistance of numerous additional parties, including certified public accountants (CPAs), forensic accountants, financial planners, business valuation experts, executive compensation experts, or trust officers. When constructing a final divorce decree for high income parties, a number of factors need to be taken into consideration in order to avoid unforeseen tax consequences.
Lawyer for High Income/High Net Worth Divorce in Houston, TX
Are you filing for a divorce in Southeast Texas involving significant assets of high value? It is in your best interest to immediately contact [firm].
Houston divorce attorney Michael Sydow represents clients in communities all over Harris County and Fort Bend County.
Call [phone] today to have our lawyer provide an honest and thorough evaluation of your case during a free, no obligation consultation.
Overview of High Income/High Net Worth Divorce in Harris County
- What kinds of issues do spouses typically have in high income divorces?
- What happens when one spouse tries to hide assets in a high-income divorce?
- Where can I find more information about high-income divorce in Houston?
Common Issues in Texas High Income/High Net Worth Divorces
Many divorces involving high net worth individuals involve disputes similar to those inherent in cases involving families of lesser means. Some of the most frequently contested issues in high-income divorces include, but are not limited to:
- Postnuptial and Prenuptial Agreements
- Ownership, control, operation, and division of closely held businesses or corporations
- Tracing of assets
- International assets
- Reimbursements due from one marital estate to another
- Property Division
- Child Support
- Child Custody
Hidden Assets in Harris County High Income/High Net Worth Divorces
As mentioned above, the division of property can be one of the more contentious issues in any divorce. Texas is considered a community property state, meaning that all property acquired during the marriage is presumed to be equally owned by both spouses. Certain types of property can be considered separate property that is not subject to division. Examples include property that was acquired during marriage by gift, devise or descent and property acquired with assets that can be proven by clear and convincing evidence to be the separate property of a spouse.
In high-income/high net worth divorce cases, one spouse may attempt to conceal certain assets, or to mislead about the manner in which they were acquired. It is important to have an attorney who is experienced in family law and also in sophisticated business matters to unravel property characterization issues, or disprove misleading evidence as to characterization. The court can punish a spouse who is dishonest about the assets that he or she is required to disclose to the court, or about the manner in which they were acquired.
Often a spouse may try to relocate significant assets overseas where it is supposed that a Texas Court has no jurisdiction. There are may ways to address such efforts, such as proving that such conduct constitutes a fraud on the marital community.
Texas Family Code § 7.009(b) establishes that when a court determines that a spouse has committed actual or constructive fraud on the community estate, the court will:
- calculate the value by which the community estate was depleted as a result of the fraud on the community and calculate the amount of the reconstituted estate; and
- divide the value of the reconstituted estate between the parties in a manner the court deems just and right.
Under Texas Family Code § 7.009(c), the court can then grant any of the following legal or equitable relief necessary to accomplish a just and right division of the reconstituted estate under Texas Family Code § 7.001:
- awarding to the wronged spouse an appropriate share of the community estate remaining after the actual or constructive fraud on the community;
- awarding a money judgment in favor of the wronged spouse against the spouse who committed the actual or constructive fraud on the community; or
- awarding to the wronged spouse both a money judgment and an appropriate share of the community estate.
Actual fraud is typically harder to prove than constructive fraud because the burden of proof for actual fraud is upon the person alleging fraud, whereas the burden of proof is transferred to the spouse accused of fraud when constructive fraud is alleged.
Actual fraud “involves dishonesty of purpose or intent to deceive,” and an in order to “sustain a cause of action for actual fraud, the appellant has the burden of showing that the gifts were made with the primary purpose of depriving her of having the use and enjoyment of the assets comprising the gifts.” Horlock v. Horlock, 533 S.W.2d 52 (1975)
Constructive fraud is presumed when a spouse transfers community property outside of the community without the other spouse’s knowledge or consent during the marriage. Once constructive fraud is alleged, the responding spouse has the burden of rebutting the presumption of constructive fraud by proving the property was transferred fairly.
Many countries have international treaties with the United States that facilitate enforcement of Texas Domestic Relations orders internationally. It is important in such cases to have an attorney experienced in international matters as well as family law.
Texas High Income Divorce—Net Resources
Texas Family Code | Chapter 154. Child Support — Net resources calculated by the court to determine child support liability must include five categories listed under Texas Family Code § 154.062(b) but do not include the four categories listed under Texas Family Code § 154.062(c). The key provision in this chapter as it relates to high-income divorces is Texas Family Code § 154.125(a), which states that the guidelines for the support of a child are specifically designed to apply to situations in which the obligor’s monthly net resources are not greater than $8,500. Texas Family Code § 154.125(a-1) establishes that this cap is adjusted by the Title IV-D agency every six years as necessary to reflect inflation.
How to Read Your Investment Statements (and Actually Understand Them) — View the full text of a 2015 Lifehacker article discussing how to read your 401(k), IRA, or other investment statements. The article covers account summary, account detail, and portfolio performance sections. As the article notes, “different investment firms use different lingo and have different ways of presenting your info.”
Find a High Income/High Net Worth Divorce Attorney in Houston, TX
If you are involved in a high-income/high net worth divorce in Southeast Texas, it is in your best interest to immediately retain sophisticated and experienced legal counsel. [firm] helps individuals in communities all over Fort Bend County and Harris County.
Michael Sydow is an experienced attorney in Houston with years of experience in family law, custody matters, and international issues in divorces. In addition he is a Fellow for the Texas Bar Foundation. He can review your case and answer all of your legal questions as soon as you call [phone] or complete an online contact form to schedule a free initial consultation.