A divorce can be stressful for any number of reasons. People are splitting their lives and moving on in their own directions. For couples with a large number of assets, the divorce process can lead to even more headaches as people fight to keep valuable property and secure their financial stability. In many cases, people need to be extra careful during a high income divorce that their interests are protected from the start of the case until the divorce issues have been decided.
In particular, property division issues can be contentious in a high-asset California divorce. California is one of nine community property states in the country. This means that a couples’ assets are split equally among them when they divorce — unless a prenuptial or other agreement says otherwise.
The California Supreme Court recently affirmed and strengthened this notion in a court case involving famous singer Frank Valli. In 2003, Valli purchased a $3.75 million life insurance policy after some heart issues and designated his wife the sole beneficiary and owner of the policy. However, a year later the couple separated.
Valli argued that he was entitled to half of the value of the life insurance policy when the couple divorced since the policy was purchased using a joint account. After years of legal battles, the high Court agreed. The court ruled that despite the beneficiary, a written statement giving up a marital share is necessary for property to be exempt from a 50-50 split. Since there was no written statement in this case, Valli was entitled to half the value of the policy.
Legal intricacies, such as this one, need to be understood by those seeking a high asset divorce. With the right legal help, those divorcing in California can protect their interests and finish the divorce on a solid financial foot.
Source: San Francisco Chronicle, “Frankie Valli wins divorce case in California Supreme Court,” Bob Egelko, May 16, 2014