What Issues Do High Net Worth Family Lawyers Need to Know About in BC?

High net worth family lawyers handle divorce, separation, and other family law matters where significant wealth is involved.

These matters are more complex than standard family law issues because of the volume, variety, and often hidden nature of the assets at stake.

If you’re going through a divorce or separation in British Columbia, you’ll need to spend time selecting the right family lawyer and gathering the right information to share with them. Let’s look at the main issues that your lawyer will need to be familiar with as proceedings unfold.

What are the extra complexities of a high net worth divorce in BC?

When you have real estate holdings, pensions, savings, stocks, and corporate or business interests, divorce tends to be more complex, especially in longer marriages where finances have become largely “commingled”.

Nowadays, high net worth (HNW) divorces often involve assets worth several million dollars or more (well above the traditional $1 million threshold used).

The general issues in high asset divorces are usually the same as with all divorces: 

• Parenting.
• Child support.
• Spousal support.
• Division of marital assets and debt.

However, fair distribution of assets and determination of support issues tends to be much more complex where the assets are numerous, with business interests, offshore assets, and trusts often needing to be factored in.

Unraveling the financial picture can be daunting without legal help. Even standard divorce lawyers may not have the necessary skills and experience to handle such cases.

This is where a high asset family lawyer can be of benefit. Among other things, your lawyer will protect your legal rights, and:

• Investigate the financial position of the other spouse.
• Identify and value the range of assets. 
• Check for hidden or non-disclosed assets.
• Check and advise you of the tax consequences of division/support issues.

What are the main issues for high net worth family lawyers to be aware of in BC?

In British Columbia, any family lawyer needs to be familiar with the main legislation governing family matters, namely the Family Law Act (FLA) and the federal Divorce Act.

Lawyers working for high net worth individuals must also have a good understanding of how courts have interpreted the laws in various contexts (the common law) and an in-depth understanding of how these issues are handled when asset values are particularly high:

• Property division: family property is divided equally by default, but excluded property (assets brought into the relationship, inheritances, and gifts from third parties) is not subject to division. In HNW cases, this distinction is frequently contested, particularly where:
  • Excluded property has become commingled with family property over time.
  • The growth in value of the excluded property is claimed by one spouse.
  • Complex corporate or trust structures obscure what is truly “family property.”

• Business interests and valuation: BC family lawyers must understand how to commission, interpret, and challenge business valuations, and how courts treat the difference between the family property portion of a business and its total enterprise value.
• Trusts: Your family lawyer must know whether any trust assets constitute family property, whether a spouse is a beneficiary, and whether a trust was structured specifically to shelter assets from division (the BC family courts may “look through” a trust in appropriate circumstances).
• Pension and investment assets: Large defined benefit pensions, stock option plans, deferred compensation, and investment portfolios all require valuation and division from a qualified HNW lawyer.
• Hidden and offshore assets: Forensic accounting may be needed to trace assets held through corporations, offshore accounts, or foreign jurisdictions.
• Spousal support: The Spousal Support Advisory Guidelines can produce very high figures, and courts have discretion to depart from them, making an expert argument from your lawyer essential.
• Child support: In HNW cases, section 7 special and extraordinary expenses (private school, sports, travel, medical) can be substantial and are often hotly contested.

High net worth family law issues beyond divorce

Outside of the main divorce issues, high net worth family lawyers also need to be well-versed in prenuptial, postnuptial, and cohabitation agreements, jurisdictional issues (for assets held in other provinces or countries), the tax implications of decisions, and the confidentiality and privacy requirements of their clients.

Note that under FLA requirements, both parties must obtain independent legal advice for prenuptial, postnuptial, and cohab agreements to be enforceable.

What should you look for when selecting a high net worth divorce lawyer?

Now you know the main laws and legal issues that a high asset lawyer needs to know about in British Columbia, what other qualities should you look for when choosing your lawyer?

Here are the main characteristics that most clients seek:

1. Extensive legal experience: To start with, the most obvious quality your lawyer will need is considerable legal experience, because of the extra complexity in high asset cases.
2. Financial knowledge: Your lawyer will need an excellent grasp of finance, accounting, and tax, and the associated legal points, because the financial stakes of decisions are usually very high.
3. Effectiveness inside and outside the courtroom: Alternative dispute resolution methods, such as mediation, collaboration, and arbitration (which prioritize confidentiality), may be used to resolve disputes as well as litigation, so your lawyer should have a track record of using all the necessary methods to get the desired outcome for clients.
4. Well-developed communication skills: Check how your lawyer will communicate with you (and how often) during the legal processes, as it is essential to set the right expectations from the beginning.
5. A competent support team: Few high net worth lawyers are single-lawyer operations. The best ones usually have a support network of smart and skilled staff that you can turn to if and when your lawyer is not available.

Anyone entering a separation or divorce process, having accumulated significant assets, should take the time to consider their requirements, choose the right lawyer(s), and gather the necessary information to pass to their legal teams.

If you are in the Langley area of British Columbia and need legal assistance with a high net worth divorce, DSG Family Law offers a free initial consultation to assess your situation and outline your legal options. Speak with a family lawyer today.