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The challenges of financing a high asset divorce

Tampa residents who are contemplating divorce may also be considering the financial implications of a divorce as well. Divorce can alter current finances and lifestyle greatly, and in some cases, a divorce can prove to be quite costly.

In many high asset divorce cases, where millions of dollars are at stake, a divorce can be both costly and lengthy. In some cases, a drawn-out litigation process can prove to be harmful to the spouse with less money, who may be rivaling a spouse with deep pockets.

Some legal firms are now developing "divorce financing," specializing in financing the lengthy periods of divorce that may be detrimental to a spouse with lesser capital. Many times, it is common for spouses with financial power to attempt to tactically run up legal fees quickly, in order to damage the other spouse.

While not generally structured as a loan, the firms typically receive a retainer, and then take the remaining expenses on until a settlement is reached, at which point they collect their contribution. Firms very often deal with spouses of doctors, finance company managers, accounting partners, accountants or hedge fund managers. For most of the divorce financing companies, there is a significant amount of underwriting to determine whether the firm will prevail, with heavy risk-reward analysis.

The finances of a divorce can be very complicated and create both emotional and financial stress. A divorce may change many aspects of a person's finances, and may mean making lifestyle changes. If you are considering a divorce and are concerned about finances, it is important to speak with your attorney and to bring as much paperwork as possible, so you may be advised regarding your particular situation. Helpful paperwork to bring to your attorney may include recent state and federal tax returns, proof of both your spouse's and your current incomes, bank statements, stock portfolios, trusts, retirement information, pension information, bills you are currently paying, your monthly budget, mortgages, and any prenuptial agreement you may have in place.

Deciding whether to divorce is a very difficult decision to make. There are many considerations, both emotionally and financially, and it is important to know what your legal options are. An attorney can help advise you, as well as provide information regarding what you should be entitled to in a divorce.

Source: NBCNews.com, "For the poorer spouse, financing for the divorce battle," April 17, 2013

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Busciglio & Sheridan Law Group
3302 N. Tampa Street
Tampa, FL 33603

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