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