Fortunately, Indiana has a strong and growing economy with little debt. For this reason, along with its central location, many marital estates are in excess of one million dollars. Divorcing parties in this situation are fortunate in that they likely have enough money to properly account for the basic cost of a divorce which is a complex legal transaction (including tax issues, determining finances through a financial declaration, attending a parenting class, and valuing and dividing assets that were often not contemplated to be divided).
With the high asset divorce, there are two great challenges facing lawyers and their clients. The first is child support. Where there is one parent who is a high income earner, and he or she is not seeking custody, the child support guidelines flatten out (increase very little on weekly child support) at the upper end of the income spectrum. This means that a custodial parent may not be able to afford the lifestyle for the child as before.
This is somewhat incongruous with the Child Support Rules and Guidelines that contemplate that divorcing parents will maintain a similar lifestyle for the child as during the marriage. To do so, there are a number of ways a lawyer for the lower earning, custodial parent may explore through counsel intimately familiar with these situations, such as an unequal division of the marital estate to rehab maintenance to allow the custodial parent to return to school to obtain training or a degree to increase earning power.1
For this reason, it is important in high asset divorces to have litigants who have clearly identified their financial needs for the children and lawyers who understand the flexibility of the Divorce Act, including the Child Support Rules and Guidelines. These may account for private schools to unique extracurricular activities, such as riding lessons and private tutors.
The key is to recognize that property division, to the extent it is used in some way to attempt to account for this situation, is final with the divorce. Child support may be modified narrowly within one year and thereafter on a yearly basis with changes in circumstances and income.2
The second and equal challenge in high-asset divorce is identifying, valuing, and dividing the marital estate in accordance with the division of the court. The presumption is for an equal division of the marital estate. However, a high net worth estate typically has issues that are difficult to value or divide and account for, in context with children, in one of three scenarios.
The first is with a highly skilled professional whose skills are not valued beyond his or her own person, meaning there is not necessarily good-will to value and distribute in the division. The second is with unique assets ranging from car collections to real estate. These may be in business entities that have their own claim to such. The variations of this are literally innumerable, but every asset that is marital property must be owned, “stripped” for valuation purposes of liens and claims of third parties, and then valued.
Thirdly, in most high asset divorces there are a wide variety of issues that make valuation difficult to impossible necessitating skilled counsel, such as tax basis to dissipation. The former requires a tax consultant, and the latter a private investigator to forensic accountant. Thus, it is imperative to have a divorce attorney who understands and can handle high net worth marital estates. Without this, it is likely assets will not be properly presented in the evidence for the court to divide to ensure a just and equitable division.
Dixon & Moseley, P.C. advocates handle high-asset divorces throughout the state of Indiana. We hope this blog post helps you understand and gain insight into high asset divorces and the unique legal challenges they present for attorneys. This blog post was written by Dixon & Moseley, P.C. attorneys. This is not a solicitation for legal advice or services or intended to be relied on in your case. It is an advertisement.