International High Net Worth Divorce lawyer Lorne MacLean, QC is happy to share some tips on what it takes to succeed in high net worth divorce cases. First of all, it makes sense to hire a lawyer who has a track record of winning high net worth divorce cases. International and interjurisdictional divorces involve complex personal and corporate holdings spread out across the World. Make sure your international high net worth divorce lawyer handles these types of cases regularly so they can hit the ground running on your high stakes divorce case.
Key issues in International High Net Worth Divorce will involve:
- locating, valuing and freezing worldwide assets with Mareva Injunctions
- obtaining forensic audits of worldwide family property including monies, stocks, companies, yachts and planes and real property
- grossing up foreign income to reflect lower tax rates in foreign jurisdictions
- proper choice of jurisdiction and assessment of which jurisdiction favours the family client financially and for custody issues
- getting security for worldwide asset compensation and enforcement issues
- Spousal support in high income and high property award cases
- child support in high-income cases and assessing wealth redistribution that very high child support payments could cause
- distributive taxes on property division
- assessing whether spousal support is tax-deductible if the paying spouse lives outside of Canada
- finding underreported or undeclared income
- correcting capital gains and stock option benefits so the full income gain on same is taxed not just one half AND the income is properly grossed up
Maclean Law’s international high net divorce wins have set guiding principles on lifetime protection orders, worldwide Mareva restraining orders, record-high interim AND trial child support payments, record-high interim AND trial spousal support payments, interim advance awards to fund litigation and level the playing field, Surprise Anton Pillar raids on business locations to locate undeclared income and assets and special costs awards to sanction parties who hid or failed to disclose their true income and assets.
In multimillion-dollar family property cases, the question arises: If you receive tens of millions in family property can you still get spousal support?
International High Net Worth Divorce Call 1 877 602 9900
In the April 2019 case of D v. D Lorne MacLean, QC and his team of winning international high net worth divorce lawyers won a key international and interjurisdictional divorce judgment setting a record spousal support and child support award of $116,000 per month. The court awarded roughly $20,000,000 in assets and 6 million in combined child and spousal support lump sum payments. This was based on spousal support of $100,000 per month plus additional child support of $16,000 per month converted into a lump sum. Lorne MacLean, QC and his team tenaciously uncovered millions of undeclared cash income and grossed it up to reflect it was non-taxable. Through our tireless investigations and powerful cross-examination the truth was exposed and the court, in the end, used a multi-million dollar income for the payor spouse. Our team proved the husband had lied about fake debts, that he concealed cash income and assets and that he was dishonest with the court on a number of points. We obtained a rare special costs award for the spouse’s litigation misconduct.
In today’s blog, we discuss just the high net worth compensatory spousal support award that the Court held was justified even after a huge family property settlement.
Compensatory Support Justified Even After $20 Million Family Property Award
The D decision confirms and provides a cogent analysis of why even in cases of huge family property settlements compensatory spousal support can still be justified and payable. This case provides key principles on family property and debt division, spousal and child support and special costs on the issue of Winning High Net Worth Divorce.
What rules apply to spousal support in this heady atmosphere?
[336] Section 11.1 of the SSAG provides that the formulas do not automatically apply where the payor’s gross income exceeds $350,000. Section 11.3 of the SSAG outlines two approaches in this situation: one that is suggested for use where the payor’s income is close to the ceiling and the second for use where the payor’s income is well above the ceiling, as in this case. It states:
The second approach would be one of pure discretion. Once the payor’s income exceeded the ceiling, then there would be no “minimum” for spousal support, just a dollar figure that would take into account the actual amount of child support paid, an amount which can be very large for high income cases. At some point, the large amounts of child support include a component that compensates the recipient spouse for the indirect costs of child-care responsibilities, leaving less need for spousal support to do so.
What is clear is that the larger stakes at these income levels and the complexities of the individual cases mean that the Advisory Guidelines will have less significance to the outcomes above the ceiling, whether negotiated or litigated.
[337] Even so, the “pure discretion” afforded the Court under the second approach accommodates a decision to apply the relevant formula following a detailed assessment of the economic consequences of the marriage, as well as a decision not to apply the formula; Hathaway, at paras. 45-57.
[338] In the Spousal Support Advisory Guidelines: the Revised User’s Guide (Ottawa: Department of Justice, 2016), Professors Carol Rogerson and Rollie Thompson state at p. 57:
· For incomes far above the ceiling, the majority of outcomes wind up below the SSAG ranges, sometimes well below at the highest income levels: [citations omitted].
· Even in cases far above the ceiling, however, some courts have fixed amounts within the SSAG range for high incomes: [citations omitted].
In the end result, the court found compensatory spousal support entitlement given the long marriage and even in the face of the wife receiving $20,000,000 in family property. The SSAG talk about high property awards and how these large property settlements might impact support in cases where millions of family property are divided.
The judge took the near $20,000,000 property settlement the wife would receive into account BUT still awarded substantial compensatory spousal support of $100,000 to start declining to $70,000 a month after several months as follows:
[374] A strictly needs-based analysis would not be appropriate. …D’s strong entitlement on a compensatory basis remains. The SSAG formula, though it must be applied with caution, points towards a range of $78,000 to $94,000 per month. In my view, it would not be right to apportion to Dr. D.. the entire benefit from the elimination of family expenses by reducing his support obligation in an amount equal to the expenses eliminated. This long-term marriage had many of the attributes of a financial partnership, and the benefit from the reduction of expenses incurred for the benefit of both parties should inure to both parties.
[375] Taking everything into account, I conclude that an appropriate award of support in respect of the period after the division of assets has taken place is $70,000 per month. Support should be payable on this basis at least until Dr. D.. turns 75 in August 2024, when I have forecast that he will retire. At that point, his income will sharply reduce.
(3) When will the division of assets be completed and what should happen in the interim?
[376] I have found (para. 288 above) that the division of assets will be implemented in 2019 and may continue into 2020, but should be treated as complete, for the purpose of determining incomes, as of January 1, 2020. For consistency, I treat January 1, 2020, as the date for implementation of spousal support at $70,000 per month. In all the circumstances, I think that support should remain at $100,000 per month until then.
$6 million Lump Sum Support Takes Into Account Hidden Cash Income
In D v D the husband lived overseas and had stated under oath he would never pay a penny of spousal support. So what should a Court do in these international high net worth divorce circumstances where a record-setting periodic monthly award is made but there are concerns it can be collected? Here is what the Court decided in D V. D:
[377] In my opinion, the circumstances favour a lump sum award of spousal support covering the period from the issuance of this decision until August 2024. A lump sum award offers two of the advantages specifically noted in the passage I quoted from Davis v. Crawford (at para. 339 above): this has been a high-conflict proceeding, and a lump sum award will terminate ongoing contact between Ms. D and D; and it will address the real risk of non-payment of periodic support that must be recognized by virtue of Dr. D past declarations and misconduct. If Dr. D elects to put Ms. D to the trouble of collection proceedings in S…, she should not be put through that exercise repeatedly.
In the end result, the combined retroactive support and child and spousal lump sum support award totaled $6 million with liberty to apply for more child and spousal support after a certain number of years.
Winning International High Net Worth Divorce Case Lawyers
If you have an international high net worth divorce or separation case in BC or Alberta and have questions on winning high net worth divorce call our senior lawyers today at any of our 6 offices across BC and in Calgary.
