Closely Held Businesses, Investments, and Divorce

The division of marital assets can be complicated by a number of factors when a closely held business, substantial investments and multiple real estate properties are involved. To protect my clients' financial and legal interests, I work closely with CPAs, forensic accountants and business valuators in addressing the often complex issues that arise in high asset divorce cases.

Separate Versus Community Property

In order to determine the net worth of both spouses, it may be necessary to trace commingled assets (community and separate property are mixed to the extent that they cannot be separated). For example: Let's say you have a separate money account in the amount of $100,000 at the time of marriage. You withdraw money out of that account from time to time and all the while, that account has earned interest, and then interest on interest, which is community property.

To maintain the account's separate character, you must be able to separate the separate from the community monies by clear and convincing evidence — which is sometimes impossible to do — determine the value of a business, and appraise a party's equity in closely held real estate properties and businesses. Additionally, certain kinds of property may or may not be subject to division, depending on how and/or when it was acquired or used in relation to community property. In the end, the division of marital property in high asset divorce cases can affect maintenance, retirement funds, credit scores, taxes and your standard of living after divorce.

Dividing Marital Property

My office works closely with clients and financial experts as needed in negotiations and disputes involving the division of the following kinds of marital property:

  • Executive pension plans
  • The worth of a closely held business
  • Stock portfolios
  • Equity in real estate property
  • Inheritance used to increase the value of marital property
  • Intellectual property rights

Collaboration, Collaborative Divorce And The Division Of Marital Assets

As a family law specialist as certified by the Texas Board of Legal Specialization, a qualified mediator and family mediator, and a qualified collaborative divorce attorney, I have extensive experience in guiding clients through the collaborative divorce process. Even in high asset divorce cases where the parties involved may have little patience for each other, it's often in the best interests of both to enter into the collaborative divorce process to settle the terms of their divorce. Collaborative Divorce divorce allows you to focus on your goals and interests without the interference of court and statutory timelines so that you can truly control your future by placing you in charge of the final terms of your divorce settlement.

You can arrive at a division of marital property that allows you to not be bound by the laws of the state of Texas in dividing your property and debts. Collaborative Divorce is part of alternative dispute resolution (ADR). Also under the umbrella of ADR is mediation. Similar settlements can be achieved in mediation, but mediation is a forced, pressure-filled process to get to a settlement, no matter what. Fairness is not really part of the mindset of the mediator, who is not a judge in the process. To have something like a judge, you have to go to another ADR facet: arbitration.

I am also a long-term mediator and family mediator. Some mediations, not mine, start early in the morning and go into the wee hours of the next morning, when settlements are more to flee from the process, than come to a fair resolution . . . survival of the fittest. Many times, participants settle without really knowing what they have agreed to in the settlement.

At the end of mediation, there is a Mediated Settlement Agreement (MSA). Once signed and filed with the court, it is an ORDER OF THE COURT and virtually unchangeable, except as to those areas of the MSA that are incomplete. Parties are really stuck if there is no agreement to change the terms of the MSA in the final document. Yes, the MSA is not the end of the process. There still has to be a final order that must comply with the MSA. Mistakes, both serious and inconsequential, are made in mediation. Mediation is a part of litigation. Mediation outside of litigation has no real meaning, unless the parties to mediation do not change their mind later when the lawsuit is filed.

Collaborative Divorce is as slow as the slowest participant. There is no rush to settlement. Collaborative Divorce is safe, confidential, not pressure-filled and you are treated with dignity. The parties forge their settlement, so there are no misunderstandings. All questions asked are answered, and there is no ridicule for asking questions. To my knowledge, no collaborative divorce cases since its inception in 2003 have been appealed or overturned. To my knowledge, no grievances have been filed in a collaborative divorce case. Collaborative Divorce has collaborative divorce-trained allied professionals, financial planners, CPAs, brokers and, when needed, mental health professionals, communication coaches, experts in education (for child issues) and myriad other professionals who make the process more secure and safe and have the knowledge to answer your questions while staying absolutely NEUTRAL in the process. The parties pay for this additional assistance so, unlike litigation, they are there to help BOTH parties. While your final divorce agreement is subject to approval by the court, there is no real court involvement. Collaborative Divorce divorce can avoid having a judge impose terms that no one finds ideal, after a long, contentious, costly battle.

Get Sound Legal Advice From An Experienced Lawyer

There are a number of issues that arise in a high asset divorce. One spouse may attempt to hide assets or under report the value of a business. I have the experience and resources needed to ensure you rights and interests are protected. To schedule a consultation to discuss your case, email or call 713-965-7608 to learn how I can help you.