There’s been a significant increase in the volume of high net worth divorce cases in California attributable to growth in Silicon Valley and the complex executive compensations that are a common feature of these divorces. Not surprisingly, there’s also been an increase in the number of attorneys in Northern California doing this work. And of course, no two alike.
Amy Laughlin, Founder & Managing Partner at Laughlin Legal Family Law Group in Silicon Valley is considered one of the most sophisticated complex divorce attorneys in California as her legal career began in the highly specialized, high stakes world of securities litigation. Ms. Laughlin recently answered a handful of questions she often hears from people considering divorce, especially high asset divorce.
Q How is a high net worth divorce attorney different from a regular divorce attorney? And how do you know if you need a high asset divorce lawyer?
AMY LAUGHLIN So, they’re very different. Lawyers are all trained in guiding clients through the basic statutory steps of getting a divorce. Dividing complex assets is not basic however. It’s something totally different.
For a high asset divorce, you want an attorney with that specific sort of experience. I would ask them directly; I would explore their knowledge. Ask if they have represented people at some of the venture capital firms in the Valley, like Sequoia, Google, etc. That should speak volumes. Ask them, in their experience, how carried interest has been divided in some of their cases, what methods have been used. That should tell you whether they have the necessary knowledge.
And in terms of how do you know if you need a high asset divorce lawyer, understand that having a lot of money doesn’t mean you need a high net worth divorce attorney. It’s when you have complex assets, like carried interest, RSUs, stock options, and passive income. If you’ve got $10M in community funds, that’s easy to divide: 50/50. But it’s when, say, the structure is complex and maybe hasn’t been completely earned out, or maybe you’re a founder of a company, you own a business, or have shares in a business or multiple businesses, then you need a high net worth divorce lawyer.
Q How does someone find a high net worth divorce lawyer they can trust? Can they expect them to protect their privacy in a high profile divorce?
AMY LAUGHLIN Finding a lawyer you can trust is ideally done by asking a divorced high net worth person you know who they worked with and did they like their divorce attorney, did that situation work out for them? The best way to find somebody is through a referral.
But you can always look online too. Go to their website or go to Google and look at client reviews. I would really pour over their website, too, to see what you can learn about them and their background. Then meet with a few to see if you’re a good fit.
As for protecting your privacy, well, number one, you want to make sure that the attorney is storing your information in a way that’s privacy protected. A lot of these old school attorneys, they’ve got their paper files sitting in their office and the cleaning crew comes in every day, that is not privacy protected. You also want an attorney who’s experienced in working with private judges, because if you’re utilizing a private judge, more of your information is kept private.
There are also ways to seal your files. You have to have good reason, but you want an attorney that’s experienced in doing that. We also work with people who are very good at scrubbing the internet, because there are certain things you have to file in the public court, for instance, you have to file a petition for dissolution in public court. And there are people out there gathering public information all day long. They go on to San Mateo Superior Court’s website and look at every case that’s been filed. This is what reporters do, right? There’s a rumor that so and so is getting a divorce. They will surf the internet and post something online.
Q Is there a difference between a complex divorce attorney and a divorce attorney for wealthy individuals?
AMY LAUGHLIN Again complexity and wealth are two different things. Wealthy individuals may have a lot of cash, but no extenuating circumstances with the children or their custody, and no complex financials.
Complexity in divorce can take many different forms. It could be complex because child custody is complicated by mental health issues in the family or parents living in different states or countries. Maybe there have been breaches of fiduciary duty, and it’s going to require some forensic accounting to happen. That’s complex.
Sometimes, something as seemingly simple as the date of separation can determine the complexity of a case. That date can have enormous financial consequences as it affects the classification of assets as community property. One spouse might insist that the date was before their IPO or option grant or some other significant financial event. But the other spouse says, No, it was May 29, well after the IPO. And you can’t even begin to try and divide assets if you don’t know what’s community and what’s not. So it’s not uncommon to have a separate trial just to determine the date of separation.
Q Is division of marital property different in high net worth divorce cases? Do you specifically need a high asset divorce lawyer to handle it?
AMY LAUGHLIN No, regardless of the size of the couple’s estate, the division of assets follows the same basic rules governing community property. The assets are just more or less complex. More complex division often requires working with forensic accountants to put it all together.
And I would say, yes, if you have a complex divorce, you do need a high asset divorce lawyer it you want your divorce done properly.
Q Is there a specialized divorce lawyer for business owners? If so, how can I identify one?
AMY LAUGHLIN There isn’t a special designation, but some attorneys are more experienced than others. Just ask! Ask the attorney if they’re experienced with families who own businesses. Most high net worth divorce cases involve businesses.
Q Will asset characterization in divorce vary in any way from attorney to attorney?
AMY LAUGHLIN This is one of those areas where who you hire really matters. Because if you ask seven different attorneys about asset characterization, you’ll get seven different results. And regarding carried interest, for example, the court has wide discretion in making a determination as to what portion of that carried interest is community. That’s because carried interest is highly speculative, and until there’s a liquidity event, it is complex to determine its worth.
Q Does it matter which high net worth divorce attorney I choose? Will any high net worth family law attorney be an adequate choice for a high net worth divorce?
AMY LAUGHLIN It absolutely matters. Like I said, seven different attorneys are going to get seven different results. Who you hire matters greatly. Choose wisely.
Q Is a Laughlin Legal complex divorce attorney a good choice for your high net worth divorce?
We think we’re an excellent choice. If you’d like to find out why, please reach out and schedule a consultation with a Laughlin Legal high net worth divorce attorney to see if we’re a good fit. If you or someone you love is headed for divorce, learn more about how the services we offer can best represent you and your values. Call us now at 650.343.3486 to schedule your consultation or if you’d prefer, you can email us to set up your appointment. If we miss your call, we will respond promptly and call you back as soon as possible.
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