High Net Worth Divorce Lawyer in Toronto
Although every divorce is unique in one way or another, some divorces are relatively simple from a financial standpoint, while others are much more complex. When high net worth spouses divorce, pensions, stock options, bonuses, profit sharing, and assets and income that can be difficult to quantify, may all be thrown into the mix. It is essential that a high net worth divorce has a Toronto lawyer with the necessary experience to properly manage the financial complexities. Your Musson Law lawyer has a team of experts who can valuate (and locate, when necessary) property and assets to ensure all financial and tax implications are considered. High net worth spouses may have real estate holdings in multiple jurisdictions, multiple family residences, expensive antiques, artwork, or jewelry, extensive investments, business holdings, and issues involving federal taxes.
Valuating private shares of a family business, or the break-up of businesses when both spouses are owners can also require experience and caution, and, in addition to a wide array of assets, high net worth couples also tend to have high expenses. In light of all the issues above, as well as of Section 18 of the Family Law Act, which allows a family to have more than one matrimonial home, you can see how those couples with high net worth can find themselves embroiled in a particularly complicated divorce. Whether both couples have a high net worth or one spouse is the primary income earner—and likely in control of the couple’s finances—there are many, many factors to take into consideration during a high net worth divorce.
Standard of Living During the Marriage
Whether one spouse is the primary income earner with the other spouse perhaps being a full-time stay-at-home parent and homemaker, or whether both spouses are high net worth individuals, both spouses likely enjoyed a high standard of living during the marriage. The couple may have enjoyed staff (including nannies, housekeepers, cooks, and gardeners), the children may have attended expensive private schools, and the family may have traveled or taken many expensive vacations. Even when one spouse has benefitted from the lifestyle provided by the high earning spouse, the family court will take into consideration the lifestyle enjoyed by both spouses during the marriage. This means the court will place emphasis on the continuation of the lifestyle both spouses have become accustomed to during the marriage. In other words, despite the breakdown of the marriage, it is expected that the lifestyle enjoyed by the parties during the marriage will continue after the divorce.
What is Involved in a High Net Worth Divorce?
Just as with any divorce, a high net worth divorce is similar in that spousal support, division of assets, child custody, and child support will be a part of the equation, however, where a high net worth divorce is concerned, these issues can be complex, and there will be many additional issues, including:
- Locating all assets associated with both spouses
- The proper valuation of all assets
- The determination of which assets will be considered matrimonial, and which will be considered non-matrimonial
- The determination of which spousal assets will be excluded because they fall under the gifts or inheritance category
- The determination of which spousal properties were owned prior to the marriage, which were acquired during the marriage, and which were acquired during the couple’s separation
- The determination of whether a company was formed prior to or during the marriage
- The determination of whether the court should disregard the Child Support and Spousal Support guidelines
- The determination of which properties are subject to equalization
- The determination of how rental or commercial properties, vehicles, boats, and expensive collections will be distributed
- The determination of the spouses’ base incomes, bonuses, car allowance values, expense account allowances, and profit distributions
- The determination of how intellectual properties (patents, trademarks, and copyrights) will be distributed
- The determination of how pensions and life insurance policies will be distributed
- The determination of how assets should be shared, and in what proportions (i.e., 50/50, 60/40, etc.)
Spousal Support Considerations in a High Net Worth Divorce
The goal of spousal support is to recognize any economic advantages or disadvantages arising from the marriage. Generally, the higher income spouse has an obligation to support the lower-income spouse as a method of balancing the financial impact of the divorce, ensuring a fair outcome for both spouses. The court will also take the following into consideration when determining spousal support:
- Whether any agreements or orders are in place regarding spousal support
- Who will care of the children, (if the couple have children)
- The length of the marriage or common-law relationship
- The financial means of each spouse
- The financial needs of each spouse
- The role of each spouse during the marriage
- The effect the divorce will have on the finances of each spouse
- The need to relieve the economic hardship of a spouse resulting from the divorce
- The expectation that both spouses will become financially self-sufficient within a reasonable length of time
The “problem” with spousal support in a high net worth divorce is determining what constitutes “economic hardship” within the context of high net worth individuals. Hardship could have a very different context from one couple to the next, therefore, the pre-separation lifestyle of the family must be scrutinized to fully understand that context in a high net worth divorce. Since spousal support decisions are typically made using the Spousal Support Advisory Guide, when the income of the paying spouse if above $350,000, different considerations may apply.
Regardless of whether one spouse materially contributed in a financial manner to the marriage or not, that spouse is entitled to a similar lifestyle as he or she enjoyed during the marriage. If a spouse was accustomed to having a chef, housekeeper, gardener, and nanny, then it could, conceivably, be considered an economic hardship to forego those benefits due to a divorce. If the spouses are unable to agree on spousal support, the court will conduct a means and needs analysis; what does the receiving spouse reasonably require to meet his or her “necessary” expenses in light of the standard of living enjoyed by the parties while married.
How Musson Law Can Help with Your High Net Worth Divorce
At Musson Law, we understand that navigating a divorce can be difficult, especially when you add emotions related to the divorce as well as a high net worth into the mix. Our lawyers are up to the challenge of the unique, complex issues associated with high net worth couples, and will help our high net worth clients find real estate appraisers, business valuators, art appraisers, and forensic accountants to ensure accurate valuations and the right path forward. If you are facing a high net worth divorce—or any type of family law issue—Musson Law can help. We have more than 15 years of experience, and we are proud of the fact that we provide a consistently exceptional client experience that goes far beyond legal issues. Contact Musson Law today for all your family law needs.