Divorces with large amounts of money, investments, and property at stake require careful handling to achieve an optimal outcome. With professional assistance, you can make well-informed decisions and tackle the legal aspects of your high net worth divorce with confidence.
The Unique Challenges of High Net Worth Divorce in Canada
Divorce is never easy, but high net worth divorces often involve complexities that others do not. Here are some of the unique challenges that accompany such divorces:
- The General Approach: Remember that in Ontario we do not divide individual assets and liabilities (unless legal ownership is joint). We value the increase in one’s net worth from the marriage date to the separation date. It follows that asset identification and valuation is key.
- Asset Identification and Valuation: One common challenge in high net worth divorces is to accurately identify and value the wide range of assets involved, from businesses and investments to real estate and personal property. Things can get especially complicated if one spouse has hidden assets. Your lawyer and associated experts must know how to read financial documents that will lead them to intelligently inquire about otherwise not visible assets.
- Tax Implications: High net worth divorces often require substantial tax considerations, particularly when it comes to reallocating assets in a way that minimizes tax liability for both parties.
- Business Ownership: If one spouse owns the shares in a corporation, we will likely need the assistance of valuation experts. Where both spouses own shares, both the valuation and division of that business can become particularly contentious. The family law lawyer must have an appreciation of the minority shareholder “oppression” remedies that are found in corporate legislation.
- Division of Complex Investments: High net worth individuals often have complex investment portfolios that include such things as restricted share units, vested and unvested stock options, etc. These can include domestic and international holdings that could need an expert valuation to quantify and include in one’s “net family property”.
- Spousal and Child Support: With high net worth divorces, determining appropriate spousal and child support payments is often complex. Both the Federal Child Support Guidelines and the Spousal Support Advisory Guidelines have high-income points over which the court has much more discretion. How do we convince the court (or other decision-makers) to exercise that discretion in your favor? How much support is “enough”?
- Legal Expenses: High net-worth divorces are often costly due to the need for specialized accountants and financial advisors, as well as the potential for prolonged litigation. Consideration should be given to alternate modes of dispute resolution such as “mediation/arbitration”.
- Marriage Contract Disputes: While marriage contracts are common in high net worth marriages, disputes over the validity and interpretation of these agreements often arise during divorce proceedings.
- Common Law’ Divorces’: Let us not forget those who are not legally married. The “joint family venture” concept is a key concept for common law couples. Not every relationship qualifies. Ontario’s regime for common law couples is not the same as for married couples and using the ‘equalization of net family property’ approach in common law relationships is not likely advantageous for the partner in the economically superior position.
Legal Strategies for High Net Worth Divorce in Ontario
Lawyers handling high net worth divorce cases employ various strategies to address the complex financial and legal issues these cases present.
The lawyer should put together a well-qualified team of experts, including forensic accountants, appraisers, and business valuators. One wants all assets and liabilities identified as at the date of marriage, date of separation, and (in some situations) current date. Then the task becomes affixing a “fair value”.
Tax optimization strategies are key in high net worth divorces, so lawyers frequently collaborate with tax specialists to minimize the government’s cut upon the division of jointly owned assets.
Lawyers also prioritize client privacy in high net worth divorce cases. They often engage in alternative dispute resolution methods, such as mediation/arbitration, to avoid the publicity of court proceedings. They can advocate aggressively for their client’s financial security, negotiating settlements that preserve their lifestyle to the greatest extent possible or safeguard assets that are rightfully theirs. Throughout the process, a good lawyer will maintain clear, proactive communication to provide guidance and build a strong relationship built on trust.
Why Choose Us?
Choosing the Gene C. Colman Family Law Centre for your high net worth divorce case means placing your trust in a team committed to providing tailored legal solutions.
Our lawyers have experience in resolving complex matters involving parenting, child and spousal support, and high-value asset valuation leading to “equalization of net family property”. The arrangements we help to facilitate will affect your future for years to come. We aim to resolve your case in a way that allows you and your family to proceed with life in comfort and dignity.
Gene C. Colman has been a pioneering figure in family law since 1979 and the founder of a leading national family law journal. With him in your corner, you gain access to his experienced legal insights about a range of issues applicable to your case. Visit our “consultation” page for more information about our in-depth consultations. Get in touch with the Gene C. Colman Family Law Centre today to take the first steps to arrange your initial remote consultation with Gene C. Colman.