High Net Worth Divorce – Do’s & Don’ts
Part 1: Don’ts
High Net Worth divorces are different than other divorces. They are more complicated, often take longer to resolve, and are more expensive. Vancouver high net worth divorce cases require a unique approach. Calgary high net worth divorces require financial and reputational privacy to protect you and your children. Most of all, high net worth divorce disputes require that you have a skilled divorce lawyer on your side who knows how to win a negotiated settlement or trial.
MacLean Law’s High Net Worth Divorce Lawyers Act In BC and Calgary
MacLean Law has high net worth separation lawyers who have handled numerous divorce cases and we have set a number of precedents for other lawyers to use, including unequal division of a real estate development business for a husband and $83,000 monthly combined child and spousal support for a wife – which is a near Canadian record! Special rules apply to higher income earners. Contact us.
S0, what is a High Net Worth divorce? What distinguishes it from other divorces? Peter Graburn of our Calgary office explains, a High Net Worth divorce is one that involves matrimonial property of $1M or more. But there are often other factors involved in a High Net Worth divorce, such as:
● Business and Financial Assets – aside from dividing the matrimonial home, some pensions and investments (RRSPs, RESPs) and vehicles, etc., High Net Worth divorces often involve dividing a variety of different assets including businesses, professional practices, recreational and investment properties, stocks, art, family trusts, and out-of-country assets, etc.;
● Grey Divorce – High Net Worth divorces often involve older couples who have accumulated significant assets over their long-term relationship. They may also have received inheritances from their parents and wish to consider passing some of these assets to their children, all of which requires special consideration. See MacLean Law Founder Lorne MacLean QC’s April 2017 post on the recent Alberta Court of Appeal decision in J.L.H v. R.S.W. (2017 ABCA 98) for more on this topic:;
● Knowledge & Control of Resources – High Net Worth divorces sometimes involve one of the spouses (often the husband) having had control of the family resources, with the other spouse not really knowing the extent or use of the assets. This situation sometimes requires particular efforts to find and preserve (ie. freeze) these assets so that they can be dealt with fully and fairly.
Furthermore, because of the value of property at stake and often the prominence of the spouses in the business and local communities, confidentiality is of primary importance.
In a previous article, I outlined the many procedural steps necessary to complete a High Net Worth divorce (ie. identification, classification, valuation and distribution of matrimonial property, etc. – Yikes!). But what are some of the practical considerations (do’s and don’ts) someone should keep in mind during the High Net Worth divorce?
High Net Worth Divorce – Do’s & Don’ts – Don’ts
Here are some suggestions for the “Don’ts”:
1. Don’t Change Financial Situation – Under the Alberta Matrimonial Property Act (MPA), property is divided at the date of trial (today), not the date of separation. If one separated spouse purchases property after separation (ie. a new residence), that property is legally included in the matrimonial property to be divided under the MPA. While matrimonial property should obviously be divided as soon as possible after separation (at least to avoid having to obtain valuations at separation and currently), this is not always possible. Try to change the financial situation as little as possible prior to resolution;
2. Don’t Rush into Settlement – Many separated spouses want to have a quick resolution of the division of their respective matrimonial property without going through the proper procedural steps (mentioned above) – they: have new relationships; want to move on, or; just want to get it over with. Division of matrimonial property, particularly High Net Worth property, takes time and a lot of effort to determine a fair and lasting resolution;
3. Don’t Compare to Others – Everyone has a friend who says they either got screwed over or got everything in a divorce settlement – don’t listen to them! Every matrimonial property case, particularly a High Net Worth property case, is different – different couples contribute differently to their partnership and Courts (if the matter goes there) will take that into account. Don’t listen to the “Greek Chorus”;
4. Don’t Engage in Bad Behaviour – Matrimonial property disputes, particularly High Net Worth divorces, are not won through twitter wars, bad-mouthing your ex, or spending the assets as soon as possible. But the Court may take these actions into account (to the negative) if the matter goes there;
5. Don’t Ignore Tax Consequences – High Net Worth divorces will inevitably have significant tax consequences. A structured matrimonial property settlement can minimize tax consequences for both parties – that’s why it’s often better to settle than to have a Court impose a decision that the parties have (little) control over. Remember – in a High Net Worth divorce, the CRA is not your best friend – a good Accountant is!
High Net Worth Divorce – Do’s & Don’ts
Contact Us Early
High Net Worth divorce is complicated – unless there is a solid prenuptial or post-nuptial agreement in place (that cannot be successfully attacked) that clearly sets out how the matrimonial property is to be divided, it can be a lengthy, procedural and sometimes adversarial process.
Do you need a pitbull or shark lawyer to assist you and guide you through this process? No. You need a practical, methodical and thorough lawyer with a strategy and “laser-like” focus on the division of High Net Worth property.
Calgary High Net Worth and High Income Divorce Lawyers can help their clients reach a fair, lasting and confidential division of their significant and complex matrimonial property and resolution of their on-going financial support issues, providing a stable and reasonable economic future for separating spouses and their children.