Is My Spouse Entitled to Half My Business During a Florida Divorce?

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When going through a divorce in Florida, the division of marital assets can be a complex and emotionally charged process. If you own a business, you may be particularly concerned about how it will be treated during the divorce. One of the most common questions is whether your spouse is entitled to half of your business.

Concerned about protecting your business during a Florida divorce? Let’s talk. Call Crystal Collins Spencer, Attorney at Law at 850-912-8080 to set up a consultation now. 

Understanding Marital vs. Non-Marital Assets

In any Florida divorce, a key step is figuring out which assets are marital and which are non-marital. Marital assets include anything you and your spouse acquired or earned together during the marriage. These are typically subject to division. Non-marital assets, however, are those that belong to just one spouse, usually because they were owned before the marriage or were received as a gift or inheritance. These generally stay with the original owner.

For business owners, understanding this distinction is essential. If your business was started during the marriage, it’s likely a marital asset. But even if it was established before you got married, any increase in its value during the marriage could be considered a marital asset. The courts will look at how closely your business is tied to marital finances and efforts. For example, if your spouse helped with the business, either financially or by working there, this involvement could affect its classification. 

How Business Ownership Affects Division

When it comes to dividing a business in a Florida divorce, the timing and nature of its ownership play a significant role. If you started or acquired your business during your marriage, it is likely viewed as a marital asset and thus subject to division. But even if you founded the business before tying the knot, any increase in its value while you were married could also be split. The court will dig into the details of how your business intertwines with your marital finances and efforts.

For example, if your spouse contributed financially, offered labor, or supported you in growing the business, this involvement can impact its classification. This means the court will consider not just the business itself, but also any marital funds or efforts that helped it thrive. 

Factors Courts Consider in Asset Division

When dividing assets during a Florida divorce, the court looks at various factors to ensure fairness. They consider each spouse’s contributions to the business, which could include financial support, labor, or even indirect support like managing the household. The economic situation of each spouse is also important; the court will look at both your financial standing and future earning potential. The length of your marriage can also play a role.

For example, in longer marriages, there’s a greater likelihood that both spouses significantly contributed to the business’s success. Additionally, the court examines whether one spouse’s career or education was put on hold to benefit the business. This is particularly relevant if one spouse sacrifices personal opportunities for the business or the family. 

Valuation of the Business During Divorce

Determining the value of your business is a crucial part of dividing assets in a Florida divorce. This process establishes the business’s worth, which influences how its value will be split between you and your spouse. To achieve this, the court often calls on financial experts who analyze various factors such as the business’s assets, income, liabilities, and market conditions. These experts use different methods to assess the value, and the chosen method can significantly impact the final outcome.

For instance, one common method is the income approach, which looks at the business’s earning potential. Another method is the market approach, which compares your business to similar ones that have recently sold. The asset-based approach evaluates the company’s assets and subtracts its liabilities. Each method has its pros and cons, and the court will decide which is most appropriate based on the specifics of your business. It’s important to understand that the valuation process can be complicated and may require professional assistance.

Protect What Matters to You with Crystal Collins Spencer, Attorney at Law

Wherever you are in the divorce process, we can help you protect your business and other assets. Call us at 850-912-8080 or get in touch online.

Is My Spouse Entitled to Half My Business During a Florida Divorce?

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When going through a divorce in Florida, the division of assets can be a complex and emotionally charged process. If you own a business, you may be particularly concerned about how it will be treated during the divorce and the division of assets. One of the most common questions is whether your spouse is entitled to half of your business.

Concerned about protecting your business during a Florida divorce? Let’s talk. Call Crystal Collins Spencer, Attorney at Law at 850-912-8080 to set up a consultation now. 

Understanding Marital vs. Non-Marital Assets

In any Florida divorce, a key step is figuring out which assets are marital and which are non-marital. Marital assets include anything you and your spouse acquired or earned together during the marriage. These are typically subject to division. Non-marital assets, however, are those that belong to just one spouse, usually because they were owned before the marriage or were received as a gift or inheritance. These generally stay with the original owner.

For business owners, understanding this distinction is essential. If your business was started during the marriage, it’s likely a marital asset. But even if it was established before you got married, any increase in its value during the marriage could be considered a marital asset. The courts will look at how closely your business is tied to marital finances and efforts. For example, if your spouse helped with the business, either financially or by working there, this involvement could affect its classification. 

How Business Ownership Affects Division of Assets

When it comes to dividing a business in a Florida divorce, the timing and nature of its ownership play a significant role. If you started or acquired your business during your marriage, it is likely viewed as a marital asset and thus subject to division. But even if you founded the business before tying the knot, any increase in its value while you were married could also be split. The court will dig into the details of how your business intertwines with your marital finances and efforts.

For example, if your spouse contributed financially, offered labor, or supported you in growing the business, this involvement can impact its classification. This means the court will consider not just the business itself, but also any marital funds or efforts that helped it thrive. 

Factors Courts Consider in the Division of Assets

When dividing assets during a Florida divorce, the court looks at various factors to ensure fairness. They consider each spouse’s contributions to the business, which could include financial support, labor, or even indirect support like managing the household. The economic situation of each spouse is also important; the court will look at both your financial standing and future earning potential. The length of your marriage can also play a role.

For example, in longer marriages, there’s a greater likelihood that both spouses significantly contributed to the business’s success. Additionally, the court examines whether one spouse’s career or education was put on hold to benefit the business. This is particularly relevant if one spouse sacrifices personal opportunities for the business or the family. 

Valuation of the Business During Divorce

Determining the value of your business is a crucial part the division of assets in a Florida divorce. This process establishes the business’s worth, which influences how its value will be split between you and your spouse. To achieve this, the court often calls on financial experts who analyze various factors such as the business’s assets, income, liabilities, and market conditions. These experts use different methods to assess the value, and the chosen method can significantly impact the final outcome.

For instance, one common method is the income approach, which looks at the business’s earning potential. Another method is the market approach, which compares your business to similar ones that have recently sold. The asset-based approach evaluates the company’s assets and subtracts its liabilities. Each method has its pros and cons, and the court will decide which is most appropriate based on the specifics of your business. It’s important to understand that the valuation process can be complicated and may require professional assistance.

Protect What Matters to You with Crystal Collins Spencer, Attorney at Law

Wherever you are in the divorce process, we can help you protect your business and other assets. Call us at 850-912-8080 or get in touch online.

Navigating the Challenges of a Gray Divorce

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As the golden years approach, some couples find themselves facing an unexpected challenge: divorce. The phenomenon known as “gray divorce” – the dissolution of marriages among couples aged 50 and older – has been on the rise in recent decades. This trend of late-life separations presents unique hurdles for those who’ve spent decades building a life together. 

The Rising Trend of Gray Divorce

Gray divorce has become an increasingly common phenomenon in recent decades. Statistics show that the divorce rate for adults 50 and older has doubled since the 1990s. This trend is particularly noticeable in Florida, a state known for its significant population of retirees and older adults. 

The factors contributing to the increase in gray divorces are multifaceted. Increased life expectancy, changing societal norms, and the desire for personal fulfillment in later years all play a role. Additionally, Florida’s retirement-friendly environment can sometimes highlight lifestyle differences or exacerbate existing marital tensions as couples adjust to a new phase of life.

Financial Considerations of Gray Divorces: Untangling Decades of Shared Assets

One of the most challenging aspects of a gray divorce is disentangling finances that may have been intertwined for decades. This process can be particularly complex for long-term marriages where significant assets have been accumulated over time.

Dividing Retirement Accounts and Pensions

For many couples, retirement savings represent their most valuable asset. Dividing these accounts requires careful consideration and often necessitates the use of a Qualified Domestic Relations Order (QDRO). This legal document allows for the division of retirement benefits without incurring early withdrawal penalties.

Social Security Benefits for Divorced Spouses

Understanding how divorce affects Social Security benefits is important. If you were married for at least ten years, you might be eligible to receive benefits based on your ex-spouse’s work record. This can be particularly important for those who left the workforce to raise children or support their spouse’s career.

Alimony Considerations in Long-Term Marriages

Spousal support, or alimony, can be a significant factor in gray divorces, especially in cases of lengthy marriages where one spouse may have been out of the workforce for an extended period. Courts often consider the duration of the marriage, each spouse’s earning capacity, and the standard of living established during the marriage when determining alimony.

Dealing with Shared Debts and Assets

From the family home to credit card debts, dividing shared assets and liabilities can be a complex process. It’s essential to get a comprehensive picture of all marital property and debts to ensure an equitable division.

Health and Insurance Challenges: Safeguarding Your Well-being

As we age, health concerns become increasingly important. A gray divorce can have significant implications for healthcare coverage and long-term care planning.

Navigating Health Insurance Coverage Post-Divorce

For many, health insurance has been tied to a spouse’s employment. After divorce, securing adequate coverage can be challenging, especially for those not yet eligible for Medicare. Exploring options such as COBRA coverage or individual plans is crucial.

Long-Term Care Insurance Considerations

With increasing life expectancies, planning for potential long-term care needs is essential. Divorced individuals may need to reassess their long-term care insurance options or consider alternative strategies for funding potential care needs.

Managing Chronic Health Conditions

Chronic health conditions can add an extra layer of complexity to gray divorce. Ensuring continuity of care and managing healthcare costs as a single individual requires careful planning and potentially the assistance of a healthcare advocate.

Mental Health and Emotional Well-being

The emotional toll of ending a long-term marriage shouldn’t be underestimated. Many silver splitters find that therapy or support groups can be invaluable in navigating the emotional challenges of late-life divorce.

Practical Aspects of Starting Over: Embracing a New Chapter

A gray divorce marks not just the end of a marriage, but the beginning of a new life chapter. This transition involves numerous practical considerations:

  • Housing Decisions: Selling the Family Home vs. Downsizing: Deciding what to do with the family home can be emotionally and financially challenging. Some may choose to sell and downsize, while others might opt to buy out their spouse’s share.
  • Developing New Skills for Independent Living: After years of sharing responsibilities, newly single seniors may need to develop new skills. This could involve learning to manage finances, cooking for one, or handling home maintenance tasks.
  • Financial Planning as a Newly Single Senior: Reassessing your financial situation and creating a new financial plan is important. This may involve adjusting investment strategies, creating a new budget, and planning for future care needs.
  • Redefining Purpose and Goals: Divorce in later life often prompts a reevaluation of personal goals and aspirations. Many find this an opportunity to pursue long-held dreams or discover new passions.
  • Embracing Technology and New Experiences: For some, adapting to life as a single person may involve embracing new technologies or experiences. This could include learning to use dating apps or exploring solo travel opportunities.

Avoiding Common Pitfalls in a Gray Divorce

Being aware of common mistakes can help you navigate your gray divorce more smoothly and protect your interests. These may include: 

  • Overlooking Hidden Assets: In long-term marriages, one spouse may not be fully aware of all marital assets. Conducting a thorough financial investigation might be needed to ensure a fair division of property.
  • Neglecting to Update Beneficiary Designations: Failing to update beneficiary designations on retirement accounts, life insurance policies, and other financial instruments can lead to unintended consequences post-divorce.
  • Underestimating Post-Divorce Living Expenses: Many underestimate the cost of living as a single person. Creating a realistic post-divorce budget is essential for long-term financial stability.
  • Rushing into New Relationships: While the prospect of companionship can be appealing, rushing into new relationships before the divorce is finalized can complicate legal proceedings and emotional healing.
  • Failing to Consider Tax Implications: The division of assets can have significant tax consequences. Understanding these implications is essential for making informed decisions during the divorce process.

Looking Ahead: Embracing Life After a Gray Divorce

While challenging, gray divorce can also represent an opportunity for personal growth and new beginnings. Some issues to consider include: 

  • Embracing New Opportunities and Freedoms: Many find that divorce in later life opens up new possibilities for personal growth, travel, or pursuing long-held dreams.
  • Maintaining Positive Relationships with Family Members: Navigating relationships with adult children and grandchildren post-divorce can be challenging but is crucial for emotional well-being.
  • Pursuing Personal Growth and Self-Discovery: Many silver splitters find that divorce prompts a journey of self-discovery, leading to new interests and a renewed sense of self.
  • Planning for Future Care Needs: As a single individual, planning for potential future care needs becomes even more critical. This may involve exploring long-term care insurance options or considering alternative living arrangements.

Your Experienced Pensacola, FL Divorce Attorneys

If you are facing the prospect of a gray divorce, seeking skilled legal guidance is essential. Attorney Crystal Collins Spencer has extensive experience handling the unique aspects of late-life divorces. For compassionate and knowledgeable legal support through your gray divorce journey, call our firm today at 850-795-4910 or message us online for a personalized consultation. 

The Role of a Forensic Accountant in a High Net-Worth Divorce

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When considerable assets are involved in a Florida divorce, unraveling them can become a significant challenge.

If one or both spouses have a high net worth, there may be structures that protect these assets. In these cases, it may be wise to hire someone who can investigate finances, whether for tax purposes, the ease of succession, or to determine if each spouse is honestly declaring their financial value.

A forensic accountant is a professional with invaluable skills who can investigate each individual’s net worth as you prepare to divide your assets.


What is a Forensic Accountant?

Sometimes, a nonprofit corporation, a for-profit corporation, a government entity, or a high-net-worth individual may employ a forensic accountant. The American Bar Association reports that forensic accountants use scientific techniques to investigate the money trail, often done when money goes missing or fraud is suspected.

In the case of a pending divorce, a forensic accountant might be used to:

  • Assign a value to any business – This includes the value if and when the business is sold and its potential for future earnings. Exploring whether one party is undervaluing their business to keep from paying more to the other spouse. Has one or have both spouses breached their fiduciary duty to the company to hide fraudulent activity?

  • Determining if one party has squirreled money away overseas where another accountant might not find it. This practice may also mask illegal activities.

  • Investigating the accurate numbers of each individual’s holdings. This includes exploring debts the other spouse may want to share upon splitting.

  • Determining the value of a family trust, living trusts, and inheritances, both now and in the future.

  • Coming up with an actual value in case one spouse argues that child support or alimony is based on the other’s earnings. It’s common for one party to understate their earnings to minimize paying child support or alimony.

  • A forensic accountant will help provide information about each spouse’s tax implications, including taxes and the cost of transferring assets due to a divorce.

How Does a Forensic Accountant Work?

At the family law office of Crystal Collins Spencer, we are very familiar with divorces in which one party tries to conceal their assets. This can be accomplished by creating a secret account, transferring offshore, transferring to a family member or friend, or creating a shell company.

When we suspect this has been done, hiring a forensic accountant will provide us with the answers we seek.

For example, a forensic accountant analyzes the deposits made into the account and the money transferred out. The numbers should result in no unanswered questions. 

A forensic accountant will also investigate whether one spouse delays receiving a bonus or salary increase until the divorce is finalized. 

The forensic accountant will look at each spouse’s bank account to determine if they made any large purchases without declaring where the money came from. These might be jewelry, boats, art, vacation property, or an expensive car. A deep dive will uncover suspicious activity that needs to be explored further. 

Particularly revealing is whether the assets, deposits, and payments have changed considerably before and after the divorce announcement. Even with the first hints of divorce, we may find that one’s assets were significantly reduced or altered in some significant way. We need to determine where that money went.

Your High Net-Worth Florida Divorce Attorney

Attorney Crystal Collins Spencer is your best ally when you are involved in a high net-worth divorce. She will walk you through the process of preparing to file for divorce, discovery, financial disclosure, settlement, and, if necessary, a trial to the final dissolution of the marriage.

Her experience, combined with her compassion, will aid you in making the right decisions both now and in the future, whether child sharing and custody, alimony, division of assets, property allocation, or modification of an agreement. You only get one chance to make this right. 

Call Ms. Spencer at her Pensacola office at 850-795-4910. Whether you live in the Panhandle, including Santa Rosa Beach, Sandestin, Destin, and Ft Walton, Ms. Spencer’s services are available to those in Pensacola and the surrounding areas. 

Sources:

ABA
https://www.americanbar.org/groups/litigation/resources/newsletters/family-law/what-forensic-accountant/ABA

The Impact of Divorce on Executive Compensation Packages and Stock Options

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Marriage to a high earner in Florida may sound like life will be smooth sailing in the years ahead. That is not the case if the marriage ends in divorce. The higher a divorcing couple’s net worth in Florida, the more complicated their divorce.

The divisions may not cover just assets such as a home, property, investments, and cars but also the executive compensation one or both spouses will receive from their employer. 

Stock options, company cars, and future bonuses may be awarded to valuable high-net-worth employees who a company wants to retain. The challenge for your Florida family law attorney is to recognize corporate compensation received during the marriage and classify it as a marital asset subject to equitable distribution.

Complex assets include:

  • Supplemental Executive Retirement Plans,
  • Profit sharing plans 
  • Life insurance benefits
  • Pension benefits
  • Top-Hat Plans
  • Deferred compensation plans,
  • Excess Benefit Plans
  • IRAs and 401(k)s 

Equitable Distribution

Unlike a community property state such as California, where half of the community property is divided 50/50 in a divorce, Florida follows equitable distribution, allowing the couple to negotiate assets that are valuable to them. For example, the wife may value furniture and jewelry more than the husband and retain those items instead of cash.

Ultimately there may not be a 50/50 split of assets but an equitable or fair share of property. 

Both states are no-fault, and adultery is rarely considered unless there is a child custody question. The judge has the option to consider each individual’s financial circumstances. When there is a sizeable difference in each spouse’s income, the judge can consider additional compensation as long as it was accrued during the marriage and with marital assets.

The court will consider the length of the marriage. Additionally, credit card debt will also be divided.

Transparency of Executive Compensation

Another challenge is recognizing when these bonuses are delayed in light of a divorce to avoid sharing the compensation with their spouse.

An employee may have been able to purchase stock in his company at a lower price than the actual market price when they exercised their stock option. When dividing these assets, it’s essential to consider the tax consequences and whether the stock has dropped in value or increased. 

The divorcing spouse may take a portion of stock options, 401(k) plans, pensions, and IRAs instead of cash. A judicial order may be required to establish you as an alternative recipient of these benefits.

Whether a stock, bond, executive compensation, or security, estimating their value may require the company to be brought into court to determine the actual value. 

If compensation is deferred or withheld until the future, the ultimate value must be considered in a Florida divorce. 

Contributions made during the marriage with marital assets and a company match may restrict access, so it’s important to understand the rules of these plans before counting on collecting their assets.

A divorce settlement may specify that executive compensation and stocks be held in a trust for the benefit of the non-employee spouse.

Prenuptial Agreement Post Nuptial Agreement

In some cases, one of the spouses may have signed a prenuptial agreement or prenup. It guarantees that one of the spouses wants to keep everything he earned and is not subject to equitable distribution. To make a prenup or postnup legitimate, your attorney will tell you what you are giving up when you sign one before or after the marriage. 

It may be more than you intend, especially if children must be provided for. 

Your Florida Family Law Attorney

It’s essential to understand the assets you accrued in the marriage, the various types of executive compensation, and how they are divided in light of a Florida divorce. 

Attorney Crystal Collins Spencer will be your ally in understanding what may be available when assets are co-mingled and when they are intentionally kept separate.

She insists on transparency in the divorce process and is an expert at uncovering assets subject to equitable distribution. Executive compensation, stock options, and health care benefits are valuable assets in a high-asset divorce that must be included in a divorce settlement.

Contact her at her Pensacola office at 850-795-4910. She provides valuable divorce knowledge for high-net-worth divorcing couples throughout the Florida Panhandle.

Minimizing Reputational Damage During High-Net-Worth Divorces 

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A Florida high-net-worth divorce can become incredibly complicated. The couple’s many assets must be identified and valued. These may include property, businesses, homes, cars, art, and antiques.

This assumes all the assets are disclosed, which is not necessarily the case every time.

A couple can work together to negotiate their dissolution, or the proceeding can become contentious, requiring them to go to trial.

Amidst the divorce proceedings, one spouse may opt to tarnish the reputation of their soon-to-be ex-partner. That can be done through online platforms such as social media or in a less-than-flattering media interview. The media’s fascination with high-net-worth divorces often uncovers unsavory details, typically to the detriment of one party.

Given the potential for reputational harm, factoring this into your Florida divorce mediation is crucial. A seasoned family law attorney is your most reliable guide to navigate these turbulent waters, ensuring a fair distribution of assets under Florida law and shielding you from the reputational damage that one spouse may inflict on the other.

Equitable Distribution

Unlike some states, such as California and Texas, which are community property states, Florida law requires that assets be distributed equitably. That does not necessarily mean equal division, but it does allow the couple to determine what is essential to each of them and negotiate accordingly.

In a high-net-worth divorce, we often find a prenuptial agreement in place. Both spouses sign the contract before their marriage and after consulting with their individual lawyers. Its contents are private.

The purpose is to protect substantial wealth in a legally binding insurance policy of sorts. A spouse who finds the proposed agreement insulting can simply refuse to marry.

A prenup signed a day before marriage may ultimately be unenforceable because it can be presumed to have been entered into under duress. A signed prenup may also be invalidated if one partner has not fully disclosed their assets. However, you should not assume that a prenup can be challenged. On the face of it, a prenup is generally recognized by the Florida court as a valid agreement.

Before the marriage, the couple should discuss their wealth. They must be honest about their assets, disclose all and any discrepancies in their wealth, and how that will be divided in case of a divorce. If they agree and commit their agreement to writing, the division of assets will be easier in the event of a divorce.

However, suppose the divorce becomes contentious, and one wants to challenge any previous agreement. In that case, one spouse can try to leverage more money under the threat of disclosure or bad press.

Social Media

A great deal of harm can result when a high-net-worth individual wants to use the media to help navigate their divorce. It can spiral downward into a nasty electronic fight. Children will be collateral damage, as will the high-net-worth individual’s reputation. Their business may be damaged, as well as their ability to conduct future business.

A harmful post can hurt both spouses. Someone who wants more in an equitable distribution may post they are disadvantaged in their settlement. The other side will look for online evidence that they live a good life and are not impoverished. Both sides have reputational harm as a result of a negative post.

Additionally, a social media post can be used to hurt one spouse during settlement negotiations.

A prenuptial agreement should address the potential use of social media as a negotiating tool to pressure a more attractive settlement and discourage that option.

It’s advisable to:

  • Regularly audit your posts for any negative information
  • Make sure your settings are private so no one can spy on your communication.
  • Change passwords regularly.
  • Avoid removing any information while you are in litigation or expecting to enter into legal action. To do so could be considered destroying evidence.
  • Think before you post anything that someone can use against you.
  • Never share details of a prenup, a settlement, or ongoing negotiations with the media.

Your Florida Family Lawyer

Serious reputational damage and privacy issues can result from ignoring social media during a high-net-worth divorce.

Attorney Crystal Collins Spencer understands the pressures of a high-net-worth divorce and can help manage your reputation during this challenging time. Call her Pensacola office at (850) 795-4910 to arrange an initial consultation about your upcoming divorce and share your concerns about reputational harm with her. Ms. Spencer has the experience and compassion to listen and act on your behalf.

High Net Worth Divorces: Understanding the Intricacies of Valuing Private Equity Holdings

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Over recent years, some high-net-worth individuals have emerged from the middle class by playing the market and investing in real estate. However, a typical eight percent return may not suffice for some with loftier financial aspirations. Private equity increases the risk but may also result in higher yields on your invested money.

Also increasing is the complication in valuing private equity holdings when facing a divorce.

In the unfortunate situation of dissolving a marriage, art, jewelry, homes, property, second homes, and boats can all be valued. Private equity holdings represent complexities to valuation and may have tax consequences that must be considered.

An experienced family law attorney will advise you on separating these holdings when facing a Florida divorce.

Private Equity Holdings

In a Florida divorce, a divorcing couple follows the Florida equitable distribution guideline. That means assets acquired during the marriage become marital property and are subject to division.

Unlike a community property state where 50/50 division is the standard, equitable division allows the couple to consider their version of what they believe is “equitable.”

For example, a boat purchased with marital assets may mean more to the husband than the wife, and in turn, she can retain something of similar value purchased with marital assets.

Meanwhile, homes, property, art, jewelry, and second homes all have value, which can be accurately ascertained.

However, the value of a private equity fund (PE) is often unclear, as it is increasingly an investment choice for ultra-high-net-worth individuals. They promise higher returns, especially over the long term, but PE involves risk and is not easily liquified. Typically, an investment lasts from five to 15 years.

While company shares can be valued, private equity (PE) refers to shares of a company that are not listed on the stock exchange.

Private equity partnerships may manage and invest in mature companies before they are sold. To value private equity, the company’s future profitability must be considered by looking at the earnings projection, management team, growth projections, and current revenue.

Also, consider the industry: Is it likely to grow in the future?

Valuing Private Equity Holdings

When dividing private equity holdings, valuation should consider publicly traded comparables, company analysis, and discounted cash flow methods. These are standard approaches in private equity valuation:

  • Publicly Traded Comparables (Comps): This involves comparing the target company to similar publicly traded companies using various financial metrics such as price-to-earnings (P/E) ratio, enterprise value-to-EBITDA (EV/EBITDA) ratio, and price-to-sales (P/S) ratio.
  • Company Analysis: This includes a detailed analysis of the target company’s financial performance, growth potential, and market position.
  • Discounted Cash Flow (DCF): This method estimates the present value of the company’s future cash flows, adjusted for risk and time value of money.

Complications in a Florida Divorce

When facing a Florida divorce, several issues can arise:

  • Prenuptial and Postnuptial Agreements: If one of these agreements exists, asset valuation may be a moot point if the assets are excluded from the division. Florida law allows for prenuptial and postnuptial agreements to dictate the distribution of assets, potentially bypassing the need for valuation.
  • Expectation for Future Investment: Calculating the value of private equity holdings can be challenging due to the expectation of future investments to realize the fund’s total value. Legal and tax advisors may need to analyze both the present and future value of these investments.
  • Volatility: Private equity investments are typically long-term and can be highly volatile. The value of these investments may fluctuate significantly, and there is always a risk of the company failing. Any valuation should consider the potential for losses and the long-term nature of these investments.

Buyout or In-Kind Transfer Options

  • Buyout Option: One spouse may buy out the other’s interest by paying half of the estimated valuation. Taxes and fees should be considered in this process.
  • In-Kind Transfer: This option allows the spouses to split ownership equally, with each spouse responsible for providing additional capital when needed to increase the investment.

Valuation Process

  • Director Consultation: A discussion with a company director may provide insights into the value of the investment and its future prospects.
  • Financial Statements and Tax Returns: These documents are essential for estimating the fair market value of the investment. Normalized financial statements, which adjust for non-recurring or non-economic items, provide a more accurate picture of the company’s earning capacity.

Your Florida Family Law Attorney

Attorney Crystal Collins Spencer understands the complications presented by dividing the assets of a high-net-worth couple in a Florida divorce. She is focused on providing her clients with a sound plan that allows a spouse to move on with their lives, retaining what is most important to them. During a consultation, Ms. Spencer can outline some options for moving forward. Call her Pensacola office at (850) 795-4910 to begin the conversation.

Sources:
Investopedia
https://www.investopedia.com/terms/p/privateequity.asp

Navigating the Complexities of Divorce and Pensions

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You may believe that in a Florida divorce, what is yours, with your name on it, is not subject to division. But this is not necessarily the case.

Under Florida law, a pension, 401k, IRA, or profit-sharing plan you contributed during your marriage is subject to division. Simply put, it is a marital asset.

Florida law differs from other states, which divide marital assets in a 50/50 manner. In Florida, equitable distribution is the guideline for couples to follow when they divorce.

Ensuring a fair and equitable division of assets in your Florida divorce can be complex. To navigate this process successfully, it’s crucial to seek professional advice. Crystal Collins Spencer, a seasoned family law attorney, can provide the guidance and support you need, particularly if you and your spouse have significant assets.

Crystal Collins Spencer’s expertise and experience are invaluable during this challenging time. Her deep understanding of Florida’s divorce laws and her ability to advocate for her client’s best interests make her the ideal choice to represent you in your divorce proceedings.

Divorce and Pensions

In most divorces, homes, bank accounts, property, cars, and art are divided equitably, meaning the couple will negotiate the division if they agree. The division is predicated on several factors:

Some things to consider:

  • How long they were married.
  • Each individual’s economic circumstance
  • Each person’s contribution to the marriage, including no-economic contributions.
  • Each person’s debts, especially considering debt incurred by one individual.

A retirement or pension plan is divided into the same considerations. While a pension plan, or defined benefit plan, guarantees the employee a specific amount of money when they retire, the employer fully funds a defined benefit plan into a tax-deferred investment account.

Your attorney will draft a Qualified Domestic Relations Order (QDRO). This formal order establishes your ex’s right to receive monies from your retirement plan, which the administrator can execute.

Because the retirement plan was supplemented with marital assets earned during the marriage, it is subject to division, whether a 401K, a Roth or IRA, or any retirement plan from your employer.

Even if one spouse didn’t work, contributions to the marriage could be non-economic, such as child care. The pension would still be subject to division in that case.

Complexities of Dividing a Retirement Plan

In some cases, couples have a prenuptial agreement that keeps assets away from the divorcing spouse otherwise, the theory of equitable distribution applies.

Contributions Before Marriage – It’s essential for your family law attorney to understand what type of retirement plan you’ve been contributing to and for how long. Did the contributions begin before the marriage? In that case, only those assets contributed during the marriage are marital property and subject to division.

Lump Sum—If you do not seek a QDRO, you and your attorney may opt to pursue a lump sum payment at the time of the employee’s spouse’s retirement.

Substitute Assets—Another complexity is that some government pension plan administrators may not accept QDROs. Government pension plans are not subject to QDRO requirements and are not obligated to settle with a lump sum.

In that case, the parties would have to negotiate a substitute for the assets that can’t be divided. For example, if the wife is due $25,000 from the pension plan, she might instead seek a piece of property the couple owns.

Military Retirement Divorce— In a military spouse divorce, the non-service member cannot receive more than 50% of the retiree’s benefits. Calculating benefits in a military retirement account can become very complicated.

Your Florida Family Law Attorney

A general rule of thumb is the more assets you have, the more complicated the divorce can be. Things can become even more complex when one spouse is not transparent about what he owns or when he tries to transfer assets into a hidden account.

There are many factors to consider when dividing retirement plans during a Florida divorce. You do not want to find out the hard way that you missed information that would allow you to make an essential decision for your financial future.

Let Crystal Collins Spencer be your biggest ally during this difficult time. She handles family law matters in Pensacola and the surrounding Florida Panhandle. She can be reached to arrange a confidential consultation in her Pensacola office at 850-795- 4910.

Unpacking the Complexities of Trust Funds in High-Net-Worth Divorces

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High-asset divorces are more complicated than divorces for couples of modest means, especially if trust funds are involved. A trust fund defines the formal relationship between the grantor, trustee (a third party), and beneficiary. An individual with assets transfers them into a trust, which defines who will manage the property if they cannot do so.

A trust fund is essential for protecting assets, estate planning, and naming beneficiaries. No couple expects that when they say, “till death do us part,” they will need to divide assets in a divorce, but as we know, half of all marriages fail. Unpacking the trust fund may become essential to dividing assets in a Florida divorce.

Suppose you plan to divorce or marry, and significant assets are involved. In that case, you may want advice from a family law attorney with decades of experience in high-asset divorces and marriages. Crystal Collins Spencer can help answer your questions during an initial consultation.

Trust Funds

A trust is one way to protect assets before a divorce, especially since an individual cannot move assets during a divorce. At that time, the court will consider the timing fraudulent.

There are two different types of trust funds.

  • A revocable trust means the grantor can change it at any time, has full access, and can move assets into and out of the trust. A revocable trust, overseen by the grantor, a party to the divorce, means the trust may be divided during a divorce.
  • An irrevocable trust protects property against creditors and legal judgments. It cannot be modified for any reason, which creates complications when a divorce is pending.

There are other types of trusts, and whether they are subject to division depends on the trust’s language and when it was formed.

Funding a Florida Trust Fund

Dividing a trust fund in a high net-worth divorce requires that many questions are asked and answered, for example:

  • Was the trust set up before the marriage? The funds then may be the sole property of the grantor if that can be determined.
  • If set up during the marriage, did marital funds contribute to the trust fund? Monies earned during the marriage are subject to division unless a prenuptial or postnuptial agreement specifies that the trust assets are not to be included in a divorce and both partners agree to that language.
  • Dividing a trust fund becomes more complicated if your assets have been co-mingled during the marriage. Have trust assets been deposited into a joint account? Besides cash assets, was one person working and the other taking care of the children? All contributions to the marriage will be considered in a divorce, even non-financial contributions.
  • Was the trust set up to benefit the children or their education? If so, it could be subject to division in a divorce.

Your Florida Divorce and Family Law Specialist

Attorney Crystal Collins Spencer understands that dividing a trust fund in a high net-worth divorce requires accurately valuing it. She and her team will investigate who contributed to the fund and whether all assets have been disclosed.

Ms. Spencer has seen some creative avenues someone may take to hide assets, and she understands how to uncover them.

Offshore trust funds will also be subject to investigation and division in a divorce if both spouses contribute financially to the trust. Even non-financial contributions need to be valued and considered an asset subject to division.

As a soon-to-be-single person, concessions made before and during a marriage should now be reevaluated as you plan on moving ahead without the financial support of a marriage partner.

Whether property, brokerage accounts, business interests, homes, cars, or art, you must consider the tax implications of assets post-divorce.

Seeking legal representation when considering a divorce can put you in the best financial situation as we negotiate your separation. Now is not the time to passively agree to any settlement to get it over with. It is also not the time to try to shift assets, as the court will not consider that favorably.

For more than thirty years, Attorney Spencer has advised high-net-worth individuals facing divorce in Pensacola, Sandestin, and Fort Walton.

Let Crystal Collins Spencer’s professional guidance give you the peace of mind you will need moving forward.

Call her Pensacola office at (850) 795-4910 to arrange a consultation to help you move forward in your life.

Protecting Intellectual Property Rights During a High Asset Divorce

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A high-asset divorce can bring particular complications to the settlement table.  Both parties will understandably want to retain what they consider their individual property, but a marital settlement in Florida will divide assets equitably.

While intellectual property (IP) often cannot be divided, its future profits are a consideration for a divorcing couple.

To retain your particular intellectual property rights, you must contact a family law specialist who understands the intricacies a high-asset couple brings to the table.

Intellectual Property

What is intellectual property?  It can be a book, script, radio or television show, an invention, computer code, art, or any creative effort that can be patented, trademarked, or copywritten to protect the owner.

A patent is the most common type of protection for intellectual property rights. With a patent, the owner can sell the invention or license it to another party. IP can deliver value to its owner, who can then develop, protect, and monetize the property.

Protecting Intellectual Property Rights

Several things must be done to get organized as the first step in protecting intellectual property rights during a Florida high-asset divorce. You must know what you have and its value.

  • First – Compile a list of intellectual property (IP) assets and gather the documents that validate such agreements, such as certificates, financial records, and licensing agreements. Determine who contributed to the IP, including financial and other contributions, contracts, and nondisclosure agreements,
  • Second – Hire a professional appraiser who can value the intellectual property in the present and future. That will be speculative but provide some idea of future income from the IP. Consider tax implications and the ongoing cost of maintaining the IP. A forensic accountant or IP attorney will be needed to accurately determine the value of your property before considering how to distribute it equitably in a divorce proceeding. The other option is to use this assessment as the basis for a payout now, not in the future.
  • Third – Protect your intellectual property by closing loopholes, updating confidentiality agreements, and preventing unauthorized access to sensitive information or trade secrets. Document the contributions to the IP made by both spouses.
  • Fourth – Your divorce settlement must address all of your IP concerns. With the help of your attorney, a mediation might include a post-nuptial agreement that addresses how intellectual property will be treated in the divorce. Include in the mediation the assessment of what the value of the IP will be in the future. A non-disclosure agreement, as well as other contracts, may be required as part of the mediation.
  • Fifth – There needs to be an enforcement mechanism in your mediated divorce settlement that may include monitoring and protecting intellectual property rights and a penalty for any violations.Your

Your Florida Family Law Attorney

Among the assets a divorcing couple will address, intellectual property has the potential to generate some of the most contentious and bitter fights.

That’s because it is personal property, and the owner may be very attached to his property and not willing to put it in the pool that is to be equitably divided.  However, if there is present and future value to the IP, and it falls under the definition of a marital asset, unless you’ve negotiated otherwise, it may need to be divided in a Florida divorce.

Attorney Crystal Collins Spencer advises clients that the rights to the income generated by IP will be subject to a discussion about an equitable division along with property, investments, cars, homes, and even time with the children.

At this time, staying closely in touch with the mediations is advised to explore your options thoroughly. Equitable division in Florida does not mean equal, and a settlement may become more favorable if you can work with your ex-spouse rather than have the court impose a divorce settlement.

Attorney Spencer has nearly four decades of experience in high net worth and complex divorce matters. She will be your ally in the division of IP if you call her Pensacola office, Spencer Law, at (850) 912-8080 to begin the conversation. Her family law practice represents individuals from Pensacola to Ft. Walton, Sandestin to Santa Rosa Beach, and Panama City.