Issues Unique To Divorces Involving Larger Estates
Mr. Hayes focuses his practice on matters involving large estates or complex financial issues. He has more than 27 years of matrimonial law experience, he was the fourth lawyer in the Nashville, Tennessee, area to be named a fellow in the Academy of Matrimonial Lawyers and has been selected as one of the “Best Lawyers in America” by his peers every year since 2007. Clients benefit from the experience and knowledge that Mr. Hayes brings to each case, as well as his commitment to providing sound legal counsel for every client he represents.
Cases involving large estates or complex financial issues often generate unique arguments, such as, “Should the producer of extraordinary wealth receive the majority of the marital estate?” or “Should the income stream of a business be used to both value the business and calculate an alimony award to the non-owner spouse, also referred to as ‘double-dipping’?” Mr. Hayes has successfully navigated these and other arguments unique to the cases on which Mr. Hayes has based his 20+ year career.
Cases involving large estates or complex financial issues will also almost certainly involve the use of one or more financial experts. Mr. Hayes has utilized and cross examined a myriad of financial experts throughout his career, and has gained the valuable experience necessary to successfully handle these issues. Some of the more common issues for which a financial expert(s) may be used include the following.
As a general rule, the larger the marital estate, the greater the variety of assets and investments that will comprise the estate, and the corresponding greater ability to “hide” or at least “camouflage” assets and investments within the estate. Such schemes include the use of general partnerships, limited partnerships, shell corporations, limited liability companies, offshore accounts, “off the books” investments, and even outright fraud. The use of a forensic accountant can prove essential in uncovering these types of hidden investments.
One of the most complex and contentious issues in a divorce involves the valuation of a privately-held business interest. Unlike the stock of public companies, these interests in private companies are not publicly traded and therefore there is no simple method for placing a value on the interest. It is a common mistake among the inexperienced lawyer to simply rely on a company’s “Book Value”, the value carried on internal financial statements, tax returns or simply the value of the underlying assets owned by the company, even if valued by a certified appraiser. The proper method of valuing these privately held business interests is to consider three separate approaches, an income approach, a market approach and an asset approach. It is also appropriate in most circumstances to consider the use of discounts, such as minority and marketability discounts, which can have a tremendous impact on the overall value of a business and thus greatly impact the amount of money that must be transferred to the other spouse if one party intends to retain the business.
In addition, it is fairly common for business owners to commingle their personal assets with business funds, especially when a business is starting out or struggling financially. In addition, business are often highly leveraged with debt, and sometimes the debt is owed to the business owner himself, which can make it more difficult to determine the true value of these business interests. A privately held business is also fertile ground for a divorcing spouse to hide assets from their soon to be ex-spouse. It is not too complicated to “cook the books” to provide financial benefit to a business owner in ways that are not easily detected by examining normal accounting documents.
Mr. Hayes has more than 27 years of experience working with business valuation experts analyzing private businesses. Mr. Hayes has analyzed and valued a countless number of privately-held businesses in the context of divorce, including the following:
- Professional — Medical Practices, Law Firms, Accounting Firms, Advertising Agencies, Sports Agencies, Dental Practices, etc.
- Entertainment – Song Catalogs, Music Production Companies, Lighting Companies, management companies, etc.
- Financial – Banks, Check Cashing Businesses, Collection Agencies, etc.
- Service – Cable Companies, Beer Distributorships, Restaurants, Cleaning Companies, Printing Companies, Catering Companies, Hospitals, Nursing Homes, Surgery Centers, etc.
- General – Car Dealerships, new and used, Construction Companies,
- Manufacturing – Bathtub Manufacturing, Bolt and Screw Manufacturing, Metal Fabrication, Book Publishing Companies, etc.
- Industrial – Petroleum Distributorships, Coal Companies, Gold Mining, Waste Management, etc.
- Internet Based Businesses
- Real Estate Developers, Holding Companies, Real Estate Management Firms, etc.
Contact Larry Hayes Jr., Attorney At Law
To schedule a consultation with Larry Jayes Jr. , call 615-214-5500 or contact him online.