Divorce and the Impact on Luxury Assets: Yachts, Jets, and Beyond

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Like 40 other states, Florida views divorce through the lens of “equitable distribution.” Equitable distribution requires both spouses in a divorce to be transparent about their assets before they are divided in a divorce.

The process can become particularly complicated for high-net-worth individuals who have amassed a great deal in their lifetime, whether it be property, financial accounts, investments, business interests, cars, art, yachts, jets, jewelry, and other luxury items.

Family Law Attorney Crystal Collins Spencer understands that each asset must be disclosed to be valued as an essential part of equitable distribution. Fairness and transparency are required in the process, which can become very contentious.

Ms. Spencer focuses her family law practice on high-net-worth divorces. After many decades in practice, she has amassed the expertise and compassion you need at this crucial time.

Marital Assets

In some marriages, acquiring luxury property is a priority. Maybe one spouse has a high-value car collection while the other collects art. The fair market value of these assets needs to be determined.

Equitable distribution does not mean that the value is cut in half. Instead, assets or their value will be distributed depending on the contributions each made to the marriage.

Contributions may include value other than financial. Raising children, supporting one spouse’s education, and business all play a part in determining what ultimately is equitable. Besides the contributions to the marriage, liabilities, such as debts, will all play a part in determining equitable distribution.

Additionally, some of the following factors need to be considered:

  • Is there a prenuptial agreement?   Some high-net-worth individuals marry after both parties have signed a prenuptial (prenup) agreement. In some cases, a postnuptial agreement (postnup) is created. Each spouse retains their own lawyer to advise them before signing an agreement.

Both agreements specify the ownership of possessions that have been acquired both inside and outside of the marriage. These agreements generally ensure you will keep what you brought into the marriage, but they may be vulnerable to a challenge.

A prenup or postnup can be applied to property, cars, jewelry, and financial assets, particularly if one spouse owned them before the marriage.

The theory is that you are most agreeable before a marriage. Ms. Collins will be your best ally if you are presented with one of these agreements prior to a marriage. It may not be in your best interest to sign one of these agreements as it is presented but rather use it as a basis for negotiation.

  • Fair Valuation – A luxury vehicle may be more than a car. It may hold sentimental value if it is a hobby or inherited from a relative. A professional appraiser specializing in valuations should be involved when items are highly valued. Not only the item’s value but what will it cost to maintain and retain that possession? Both should be considered to determine the actual value of an asset.
  • Lifestyle – Luxury items may include a jet, yacht, cars, jewelry, art, or something of extremely high value. In planning for the future, both parties should consider whether their life will be measurably changed without that asset.In the case of a jet – is it used as an essential part of business? Is a yacht for business or pleasure? The cost of maintaining and retaining this asset should be considered as part of the valuation. Is it a marital or non-marital asset?
  • Penalties for Hiding Assets – If you suspect valuables are being hidden, working with a forensic accountant to explore undisclosed assets such as bank accounts, offshore accounts, and hidden businesses is essential. You must launch an investigation to realize an accurate financial picture of assets.

The spouse attempting to hide assets will suffer legal consequences and lose credibility with the court.

Your Florida Family Law Attorney

Pensacola attorney Crystal Collins Spencer understands the division of assets involves valuation, liabilities, individual plans, and the ability to maintain the item. Financial professionals will be brought into the collaborative process to ensure equitable division that is fair and satisfactory.

The duration of the marriage, education, children, alimony, the health of those partners, and their ability to earn in the future will all be considered, as well as non-financial contributions to the marriage.

Ms. Collins has experience as an expert negotiator in a high net-worth divorce to address these complex financial issues. Call her Pensacola office at (850) 795-4910 to make an appointment and see how Ms. Spencer can help you.

Mitigating the Risks of Business Depreciation During High Asset Divorces

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Divorces can be complicated, and that is especially true if there are high assets involved. While both spouses must be transparent about all of their assets, it’s also crucial that they are valued accurately. Failure to do so can result in an uneven and even unfair distribution of assets.

In Florida, equitable distribution of marital assets is the guideline for divorce. That will include anything of value, whether property, house, bank accounts, or businesses.

When dividing the business asset, which may be the asset with the highest value, it first must be determined if the business is a marital asset. If it is, to mitigate the risks to the company during a divorce, some moves can be put into place either before or after the marriage to make its division more equitable.

When sizeable assets are involved, consulting with an experienced, compassionate family law attorney specializing in high-asset divorce can protect the impact on your business and, ultimately, on your relationship.

Prenuptial Agreement

If one spouse owned the business before the marriage, kept assets in a separate account, and made no money with that business during the marriage, there would not be much to divide. However, any appreciation during the marriage is subject to division unless a prenuptial agreement specifies how the business will be divided.

Before the wedding, a prenuptial agreement should detail how the business assets will be distributed in a divorce. Separate attorneys will represent each partner, and the business division should be negotiated to include the division of depreciation and appreciation of the business.

Sometimes, the business will remain with one spouse, and its value can be offset by agreeing to divide other assets, such as a house or property.

A prenuptial agreement should consider the potential impact on other partners to mitigate risks to the business.

It may be challenging to determine the value of a business down the road, so its current value should be estimated, and both parties need to agree on the methodology to be used to value the asset in the future.

The benefit of a prenuptial agreement is that both partners enter into it when they are most agreeable, about to enter into marriage, and want to avoid conflicts in the future.

Postnuptial Agreement

A postnuptial agreement is crafted after the marriage to determine what happens to a business in the event of a divorce. The other spouse may agree that the company is not subject to marital distribution, mainly if the other spouse founded it before the marriage. If that is not the case, the post-nup should establish how much appreciation or depreciation the spouses will share.

Suppose both spouses are involved in the business. In that case, they must determine whether, upon divorce, the company is dissolved, one partner retains ownership, or it continues under a new partnership agreement.

Hiding Assets

If you suspect your spouse is trying to conceal assets, Crystal Collins Spencer has the tools she needs to uncover hidden assets. She can bring in a forensic accountant to discover where assets are and their origin.

This is especially important if one spouse does not handle the family finances.

A forensic accountant is like a detective. They will conduct a detailed review of bank and tax documents to determine their consistency. Employers may help a divorcing spouse by withholding a bonus until the divorce is final. An employer can defer benefits, a company car, or a salary increase, so they are not subject to equitable distribution. A forensic accountant can uncover that tactic.

We may need to hire a valuation expert to determine the value of the business before its division in a Florida divorce.

Your Florida High Asset Divorce Attorney

If a divorce is imminent, the business can be protected by maintaining detailed records, including personal and business expenses and premarital versus marital funds.

Crystal Collins Spencer has extensive experience with high-asset divorces and can advise you to what extent the business is a marital asset or separate property. She has the experience to hire the experts needed to value the case for the court’s consideration and to gather the evidence essential to your argument.

This is not a time to try and litigate your most valuable asset. Divorce can complicate the simple division of assets. Call Crystal Collins Spencer at Spencer Law at her Pensacola office at 850-912-8080 to get started.