High Asset Divorces or Divorces involving high net-worth couples in Ireland are not hugely common compared to the “Standard” Divorce. To explain, I first need to define what I mean by a High Asset Divorce.
Understanding High Asset Divorces in Ireland
In Ireland, it is logical to define it by which Court, a couple will be divorced in. If the net assets of a high net-worth couple exceed 3 million euros, then the case must be heard in the High Court. The High Court, as its name suggests, is the Highest and most serious court that a person can engage within Ireland.
In criminal matters, it hears murder cases, it hears the highest commercial disputes, and deals with the highest level of awards in Personal Injury/medical negligence cases.
As I said, they are not that common. For Example, there were 5800 divorces in 2021 in the circuit court (any divorce with a value of assets under 3 million euros), whereas only 68 cases were heard in the High Court. So if you are in this 1% of people, I hope that this article will guide you through the intricacies of high net worth divorces.
Understanding the 1%: Who Goes Through High Asset Divorces?
So who is this 1%? In my experience, it usually involves people with a business of some description, large family farms, and or inherited wealth. It can most commonly involve persons owning a company. This may prompt the question among some, What does my asset (inheritance/company, etc.) that I sweated blood and tears for, have to do with my soon-to-be ex-spouse?
The answer is quite a lot; as most people know from TV shows and movies.
The concept of marital property for high-net-worth couples is no different in theory than in marriages with a lot less finance. Essentially this is the concept of the family pot of money i.e. everything is included and gathered together and itemised and then is to be divided so that the children and both parties are adequately provided for going into the future.
What can be more complicated in High-value divorces is of course that there is a lot more to divide and it is not always so straightforward as to whether that property should be in the family pot. In addition, what is that property worth?
Marital Property: The Complex Division in High-Asset Scenarios
A common example of a divorce involves a regular couple earning roughly the same wage. They buy a property with a mortgage and both contribute equally. In this case, it’s not difficult to say that they are both entitled to a 50/50 split.
However, a high net worth case is very different. In this case, a company is owned by one of the spouses and it’s worth many millions. Their spouse of 30 years has had a regular job and minded the children in the meantime. Arguably, this asset is the fruit of his labours – but equally arguable she provided support both financially and emotionally when he was starting out as just another budding entrepreneur.
In addition, valuing a privately held company is not a simple issue, especially when there are other shareholders involved. The company may have to be sold. This can have a ripple effect of consequences for people outside of the married couple. Equally, the issue of the inherited wealth of one spouse being included in the family pot has always been a highly vexing issue for the courts to consider, especially when the family farm is in dispute.
I mention these examples to illustrate that it is quite a complex area. I have not mentioned in this article the complexities of other assets involved such as offshore accounts, bitcoin, works of art, trusts, pension funds, stocks, bonds, etc. It is because of these complexities that I would suggest that you avoid some common mistakes.
Common Mistakes to Avoid in High Net Worth Divorces
- Rushing the Process: One of the most common mistakes I encounter is rushing the process. I understand that primarily people want to move on with their lives and do not wish to drag on the process any longer than is necessary. However, accepting a quick settlement offer “to just move on with my life” can have far-reaching consequences. More than “standard” divorces, due diligence is absolutely essential. In the majority of these types of cases, there is one party with most of the assets and the other party may not have had any need in the past to know the intricacies of the couple’s finances. They therefore need more protection and may need the benefit of a forensic accountant to properly define the extent of the marital assets. This analysis of the finances necessarily takes time especially if one party is actively trying to conceal assets.
- Concealing assets: This brings me to the next common mistake namely attempting to conceal assets. It is perhaps understandable that during the heat of a contested divorce, one party may think it’s a good idea to conceal assets or dissipate assets. This is not a good idea. The courts in Ireland really dislike this behaviour and the consequences can be very far-reaching for this person’s case. I understand that this is a traumatic time but my advice would be to be entirely up front and let the chips fall where they may.
Why Specialized Legal Advice is Non-Negotiable:
My final tip would be to immediately obtain specialised legal advice.
I cannot emphasise the importance of this in these type of cases. You will note I say specialised legal advice. This means an experienced Family Law solicitor in these types of high-value cases. Your regular solicitor may be excellent at property transactions or in drafting a will but for cases like these, experience of these high court cases is essential. Similarly, a commercial solicitor who is very familiar with dealing with high-value transactions will not have the soft skills required which a family law solicitor uses every day of their professional lives. Undoubtedly, the main reason these lawyers may not be engaged is because of the perceived huge cost.
Let’s address this issue squarely:- yes it is very expensive. For a case in the High Court, a specialist Family law Senior Counsel is engaged and also a junior counsel. Their combined fee would not unusually amount to €40,000 and your solicitor’s fees could easily amount to €60/70,0000. This is not counting other fees a high net worth case attracts such as forensic accountants, valuers, estate agents, and actuaries. The reason these fees are so high is because what you are fighting for is more high value and more complex and it goes without saying that high quality experienced legal advice is expensive. I would argue that the benefits of what you will gain in the long run will far outweigh this cost. In any event, it is simply not really possible to do this yourself so if you are engaging someone, you may as well pay for the specialists rather than paying half as much for an inferior service.
In addition, if you do take this advice, don’t wait until your spouse has served you with proceedings. Bite the bullet, get ahead of the problem, and engage a professional as soon as the decision has been made that the marriage is over. In high net worth divorces, this advice is most relevant as assets may be dissipated or potentially concealed and steps can be taken to prevent this. To allay some fears, most specialist family law solicitors understand that the less financially well-off person in the relationship will not be able to pay these fees at the outset and will wait to be paid until the conclusion of the case. So how do you decide on which solicitor is for you?
Choosing the right Family solicitor for High Net Worth Divorce:
Hopefully, you have taken my advice and chosen to use a specialised family law solicitor so the only question is which of these to choose from. In reality, in Ireland, there is quite a limited pool of solicitors who specialise in this area and even fewer who practice in high net worth cases. Effectively it’s a niche within a niche. I would emphasise that first of all, you will be spending a lot of time with your solicitor so it helps if you think you can get on with them and even better if you like them.
It’s not like buying your house where you meet your solicitor once and it doesn’t matter very much whether you like or dislike them. To achieve the best result for you, a collaborative approach between you and your solicitor works best. To work as a team you will need to trust your teammate and in this instance value their discretion. In fairness, to allay your worries, pretty much all Family law solicitors have great discretion, and have heard it all before. We have no interest, apart from a professional one, in your private life. So when deciding, it’s a personal choice.
Some personalities are attracted to hiring a “rottweiler”. This level of aggression will suit their personalities. Others understand that an understated pleasant demeanour can be more effective and further understand that this pleasant demeanour can hide an inner rottweiler when needed. As the phrase goes sometimes you get more flies with honey than with vinegar. Once you have been impressed by a solicitor, set up a meeting and assess if you feel you can work with them.
One small tip is, don’t judge the solicitor by whether they provide you with advice that you do or don’t want to hear. If you don’t hear the potential outcome that you want to hear, I would not let this dissuade you from using their services. You are not paying them to cheerlead. You are paying them to provide cold, dispassionate advice whether it is what you want to hear or not.
If you feel that the Family Practice are the type of people that you could work with for your Divorce, please feel free to contact us and set up a preliminary meeting in Dublin. I practice what I preach. If you don’t like what you see and hear, we don’t take offence.
