Should You Keep Negotiating or Take Your High-Asset Divorce to Court?
For many affluent couples, reaching a negotiated divorce settlement is preferable to putting major financial decisions in the hands of a court. Settlement can offer greater privacy, flexibility, and control while potentially reducing the time and expense associated with litigation.
But settlement only works when both spouses have enough reliable information to make informed decisions and are willing to negotiate in a meaningful way. Hidden assets, sharply conflicting business valuations, and other serious issues may cause a divorcing spouse to pursue litigation.
Sheryl R. Rentz is an experienced Villanova high-asset divorce attorney. The Law Offices of Sheryl R. Rentz, P.C. can help you decide if continued negotiations can realistically produce a fair, well-informed resolution, or whether litigation has become necessary to protect your financial interests.
Pennsylvania’s Equitable Distribution Laws
Pennsylvania follows the principle of equitable distribution when dividing marital property. That does not mean marital assets are automatically divided 50/50. Instead, courts are required to fairly divide marital property based on applicable state law.
When dividing marital property, Pennsylvania law addresses both parties’ sources of income, economic circumstances, contributions made to the marriage, and several other factors.
Even small differences in classification or valuation can translate into significant differences in the final distribution when the marital estate includes complex
What If a Spouse Is Hiding Assets or Income?
Suspicion alone does not necessarily mean a divorce needs to go to trial. But credible indications of concealed wealth can make informal financial disclosure inadequate. Pennsylvania law provides for civil discovery in divorce proceedings.
Warning signs of hidden assets or income may include:
- Large or unexplained transfers shortly before or after separation
- Previously unknown bank or brokerage accounts
- Cryptocurrency holdings that do not appear on financial disclosures
- Transfers to relatives, business partners, or related companies
- Offshore accounts or investments
- Sudden changes in business income or distributions
- Unusual loans or debts
- Assets that disappear from financial statements
- Compensation that appears to have been deferred until after divorce
What If You Have Dramatically Different Asset Valuations
Valuation disputes are common in high-asset divorce because many valuable assets do not have a simple market price.
A marital estate might contain:
- Family businesses
- Professional practices
- Commercial or investment real estate
- Restricted stock units
- Stock options
- Partnership interests
- Private investments
- Valuable artwork or collections
- Intellectual property
- Pensions and retirement accounts
- Investment properties
- Trusts
- Securities
- Family residences
- Vacation homes
When competing experts remain far apart on an economically significant asset, a judge can consider the competing evidence rather than forcing one spouse to accept a valuation that he or she believes lacks adequate financial support.
What If Your Spouse Controls the Family Business?
One spouse may run the company, communicate with its accountants, control bookkeeping systems, determine compensation, approve distributions, and understand relationships among affiliated entities. That imbalance can make voluntary negotiations difficult.
Questions may arise about:
- Owner compensation
- Discretionary business expenses
- Retained earnings
- Shareholder distributions
- Related-party transactions
- Loans to owners or employees
- Company-paid personal expenses
- Revenue recognition
- Accounts receivable
- Business debts
- Transfers among affiliated entities
- Changes in compensation around the time of separation
Formal discovery can provide mechanisms for obtaining relevant documents and testimony. Depending on the issues involved, attorneys may also work with forensic accountants or business valuation professionals to analyze the information produced.
What If You Cannot Agree on Marital Property?
Differentiating between marital and nonmarital property can be extremely difficult. For example, a spouse may have entered the marriage with a substantial investment portfolio that increased in value, inherited assets may have been mixed with marital funds, separate money may have been used to acquire jointly titled property, or business interests may predate the marriage. All of these assets could substantially appreciate over time.
Pennsylvania’s marital-property statute addresses an increase in value of certain nonmarital property, making accurate tracing and valuation particularly important. When the parties cannot agree on classification or the relevant increase in value, equitable distribution litigation may be necessary to resolve the disagreement.
What If Your Spouse Refuses Meaningful Financial Disclosure?
When cooperation breaks down, formal discovery provides additional tools. Pennsylvania law provides that discovery in divorce matters is conducted as in other civil actions under the Pennsylvania Rules of Civil Procedure. The Unified Judicial System of Pennsylvania also identifies the Pennsylvania Rules of Civil Procedure as governing divorce proceedings.
Depending on the circumstances, the process may involve:
- Requests for production of documents
- Interrogatories
- Depositions
- Subpoenas directed to appropriate third parties
- Forensic accounting
- Business valuation professionals
- Real estate or other specialized valuation experts
Speak With a Trusted Villanova High-Asset Divorce Lawyer
The Law Offices of Sheryl R. Rentz, P.C. was founded in 1992. Before practicing family law, Sheryl R. Rentz spent 16 years as an engineer for AT&T Bell Laboratories, so she brings an analytical background to financially complicated family law matters.
Sheryl personally handles every aspect of your case, and she responds to calls that come into her office. If negotiations in your high-asset Villanova divorce have stalled because of financial disclosure problems, concerns about hidden assets, valuation disputes, or other significant economic issues, we can help you evaluate whether continued negotiation or litigation better serves your interests.
Call (610) 645-0100 or (866) 290-9292 to schedule a free consultation today. Sheryl can guide you step-by-step through this difficult process.
Frequently Asked Questions About High-Asset Divorce Negotiation and Litigation
Does a contested high-asset divorce in Villanova have to go to trial?
No. A contested Pennsylvania divorce in Villanova can settle before trial. Litigation provides formal procedures for resolving disputes and obtaining information, but the spouses may continue negotiating throughout the process. Discovery, expert valuations, or depositions may provide the information needed to overcome an impasse and reach a negotiated agreement.
What if I think my spouse is hiding assets during our divorce?
Discovery can include requests for documents, interrogatories, depositions, and subpoenas. Attorneys may also work with forensic accountants or other financial professionals when appropriate. Unexplained transfers, undisclosed accounts, cryptocurrency, questionable business transactions, and inconsistencies between reported income and actual lifestyle can warrant closer investigation.
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