Many Maryland counties have their share of high asset divorces. It does not matter whether you are in Howard, Montgomery, Anne Arundel, Baltimore or any other jurisdiction, judges are occasionally required to determine the equitable distribution of millions of dollars of assets. On rare occasions, the assets number in the billions.
So, how do judges decide what is “equitable” when the assets appear to be in a staggering range. Likely the assets far outweigh the judge’s net worth, which reduces the judge’s frame of reference. It sometimes appears to be more like Monopoly money than real money when the assets reach a certain total.
We are all hearing about the recent divorce of an oil magnate from his wife. Their assets number in the billions. Specifically , their net worth appears to total somewhere in the neighborhood of $18 Billion. The Court awarded the Wife about $1 Billion, which is just above 5% of their total net worth.
Why did she not receive 50% of the net worth? How was the sum of $1 Billion arrived at? What is a Maryland judge’s authority under similar circumstances?
If I told you a Maryland judge could award all of it to the Husband, would you believe me? How about if I told you the judge could award it all to the Wife? What if I told you the judge could pretty much pick any number, and provided that the opinion was well-reasoned, any appeal would likely fail?
You guessed it–these are all potentially correct answers.
How does this relate to your high asset estate and divorce? The answer lies in the details.
In Maryland, before a judge can complete an equitable distribution analysis in any divorce case, including a high net worth case, the judge must first determine what the assets are, what their values are and which ones qualify as marital property.
After this has been done, Maryland statutes and case law “guide” the judge as to certain factors to consider in crafting an equitable distribution of the assets.
I have to pause for a minute and point out the obvious. All judges are lawyers. Very few lawyers have an extensive mathematical background. Therefore, even fewer judges understand extremely complex mathematical concepts. Yet, at trial, this is who you are relying upon to order an equitable distribution of your assets. You might want to let that percolate when deciding whether to mediate, settle or go to trial.
Let’s look at one random high asset situation, and see how the result might play out. Parties are married 15 years. Both came into the marriage with $10 Million in assets each, for a total of $20 Million in assets. These are called non-marital assets.
During the marriage, Wife stays home and raises the children, and Husband increases his assets by another $25 Million, so now his are worth $35 Million. Wife’s assets have earned interest and are now worth $12 Million.
Let’s just focus on Husband’s increased assets of $25 Million and assume they qualify as marital property.
What can the judge do with them? Could the judge let Husband keep all of it? Could the judge give all of it to the Wife? Could the judge split it down the middle? With some reasoning, could the judge pick any number between the two farthest points?
The answer is actually yes to each question.
Again, the judge’s reasoning will lie in the details.
The Court could rely on extreme marital fault-the cause of the breakup of the marriage-in fashioning the award. If one of the spouses is in extreme poor health, that could factor into the decision. There are a myriad of factors the Court is both required to analyze, and far more factors the Court may analyze, before issuing its award.
At Milstein Siegel, we represent clients in high asset cases by analyzing the assets, their character, utilizing appropriate expert witnesses, crafting appropriate strategies and then working with opposing counsel to determine the best agreed upon process to reach a resolution. Often, this will involve mediation, but occasionally, it involves going to trial.
Start working on your list of questions for your divorce attorney!
