Santa Clara High Asset Divorce Lawyers

A Santa Clara high asset divorce law firm presents: A Case Story of Commingled Assets

Love and money. Though most Americans aspire to have both, most American couples avoid talking about one of them. Odd that in a capitalist country it’s uncomfortable to talk about capital. It may be uncomfortable, but in the context of committed relationships, money – who has it, who earns it, who spends it, who’s cheap, who’s generous, and who’s judgy about it – is at the heart of many marital disagreements. Perhaps that’s because financial security is often an important consideration when deciding to marry in the first place.

According to a Forbes Advisors survey, financial security was the number one reason why 1,000 American divorcees stated they got married. Maybe we can only talk about money once we’ve decided to get divorced… If financial security is indeed an important consideration in most marriages, it makes sense that any perceived threat to that security would likely result in conflict. But how many couples are willing to fight about the very thing they’re uncomfortable talking about?

A study published by Sage Journals to learn what couples argue about reported that “Finances were the primary reason for relationship conflict in 40% of disagreements reported among people in long-term relationships.” And that “money and finances were not the most frequent topic of conflict. However, money conflicts were more stressful and threatening for couples than other conflict topics.” What specifically are couples arguing about? Financial stress, dissimilar spending behaviors, unequal commitment to the sharing of funds and decision-making power, and values or saving vs spending. Sage Journals again on the subject, “In a longitudinal study of married women spanning more than 25 years, women who reported arguing ‘often’ about money in marriage were nearly three times more likely to divorce compared to those who ‘sometimes’ or ‘hardly ever’ argued about money.”

A Santa Clara high asset divorce lawyer on love, money, and divorce.

Amy Laughlin, Founder & Partner at Santa Clara high asset divorce law firm, Laughlin Legal, has heard many, many love, money, and divorce stories. “Divorce lawyers tend to focus on the nuts and bolts of the legal process – anticipated timeline, communications, deadlines, etc. And it’s easy to lose sight of the larger story that typically began with love and devolved into incompatibility. I find that it can be enormously instructive and often comforting to tell case stories from past divorce clients to new and prospective ones. Naturally we protect all our clients’ identities and significantly alter identifying facts. Here’s a fairly unusual Santa Clara high asset divorce case story the firm resolved not long ago. See if you can spot what makes it unusual…

This story begins with the love between a Santa Clara couple who met while at an Ivy League university. As freshmen, they formed an intense attachment to each other almost immediately. Within several months, they realized they would be life partners and began planning a shared life.

The backstory to their whirlwind romance is that the woman in this couple, whom we’ll call Carrie, came from an affluent family that had been traumatized by divorce. Her parents had an unusually cruel and protracted divorce with all kinds of trouble and lingering acrimony around asset division. Carrie and her sisters became determined that to avoid ever subjecting their own children to that particular trauma, they’d simply never get married. But that didn’t stop her from falling in love with the other half of the couple, whom we’ll call Ben.

Carrie and Ben didn’t plan like most people. They planned with detail. They’d spend hours identifying markers on their relationship timeline. After x number of years, he’d cover expenses so she could get her MBA, another x number of years and they’d buy a house in Santa Clara, another x number of years and they’d have children. And to a very large degree, they stuck to their schedule. Carrie stayed on at University to get her MBA while Ben did an internship and got a job to support them both. They moved in together and merged everything they had – one joint bank account, one joint credit card. The only thing separate was their tax return.

Why it’s not a good idea to ‘merge’ before marriage in the opinion of a Santa Clara high asset divorce lawyer.

When Carrie got her MBA, she formed the startup she had been dreaming of as Ben advanced in his job. They opened a joint savings account. Just as Carrie’s startup was taking off, they bought a home. And when they signed the paperwork, they also signed a personal contract with each other. It was a cross between a poem, a love letter, and a promissory note in which they each vowed their love and their lifelong commitment to each other. In addition, they vowed their unequivocal financial equality: ‘what’s yours is mine and what’s mine is yours.’ When Carrie got pregnant several years later, Ben surprised her by getting down on one knee in the hospital room and asking her to marry him. She accepted. They put their money in a trust together.

Several years and two children later, Carrie’s startup was booming. Ben offered to introduce her to a friend, a lawyer who could protect the company from liability. And she fell in love with the friend. Carrie and Ben separated and Ben retained us.

What not to do when you’re facing a certain Santa Clara high net worth divorce lawyer…

When mediation originally failed, we hired a private judge and argued that Ben’s share of asset division should be larger although they had only been married several years, they had been together their entire adult life. Commingled assets are community assets, and they had commingled their assets as teenagers with every intention of spending the rest of their lives together. Though Carrie disagrees, we argued that Ben is entitled to a share of the company which he helped build. He should get half of everything. When they tried mediation a second time, against all the odds, the judge signed off on a very equitable agreement.”

What’s the moral of this Santa Clara high asset divorce case story?

The moral of this particular case story: Expect change. Amy Laughlin again, “Even if you both have never been more in love and have every intention of spending the rest of your lives together, things can change. If you expect change, you can make sure you’ll be covered. And there’s no harm done if change doesn’t occur. We always advocate talking about money sooner rather than later. It’s smart to develop an ongoing dialogue early in your relationship about your finances with your partner. Normalize the exchange of information about things like how much you’re earning, how much debt you carry, what your bonus will be this year. And decide together to keep your assets separate well before living together much less getting married. It’s the smart thing to do in order to protect the financial autonomy of both parties. We’re seeing more and more couples opting for complete financial autonomy, particularly Gen Z couples.”

Two high asset divorce attorneys in Santa Clara weigh in on the benefits of keeping your assets separate.

Simply put, keeping separate assets separate both before and after marriage makes their status less likely to be challenged. Amy Laughlin explains, “As the case story I shared demonstrates, while it’s unusual that assets commingled before marriage are considered community assets in a divorce case, as the case story I shared demonstrates, it can happen. The very least a couple can do is keep their assets separate before marriage.”

Caitlin Ashton, Santa Clara high asset divorce attorney and Partner at Laughlin Legal, and a skilled drafter of premarital agreements explains, “A marriage license is also a financial contract. Couples tend to overlook that. If people knew how expensive and time-consuming a divorce can be, they might be more cautious and plan ahead before getting married. It is easy to get a marriage license. It is often far more complicated to get divorced, particularly without a premarital agreement, and the average California divorce takes about 15 months. But if you have a well-drafted premarital agreement, your divorce will most likely be shorter, less acrimonious, and definitely less expensive because you’ve already outlined your intentions, together, in a legally binding way.

Would a Santa Clara high asset divorce law firm also draft premarital agreements?

For Santa Clara high asset divorce law firm, Laughlin Legal, the best outcome is what drives the practice. Partner, Caitlin Ashton, explains, “There are bad actors in every profession. But by and large, divorce attorneys try to resolve very difficult issues as efficiently as they can. At our firm, the biggest impediment to that is the divorcing couple. Almost no one is at their best when they’re getting divorced! Emotions are hot, the stakes are high, and mistrust is even higher. When one party digs in their heels and refuses to negotiate, any progress you’ve made up to that point can quickly get derailed. One of the few things that can mitigate the damages is a well-executed prenuptial agreement. Honestly, I wish every couple had one.

One of the big advantages of a prenup is it’s drafted at a time in your relationship when you’re capable of talking to each other and negotiating with each other, so you can reason things out and find a solution you both can accept in the event that the marriage ends. And though prenups are seldom challenged, there are a number of specific circumstances that could make them unenforceable. For instance,…

• if the couple’s assets have increased or decreased significantly since the prenup was signed, or
• if the agreement wasn’t notarized or witnessed properly
• if one party was forced or lied to or pressured or coerced into signing the agreement,
• if one or both parties fail to fully disclose all their assets as well as all their debts before signing
• if the agreed to terms are somehow incompatible with state law, for instance it cannot specify child custody, support or visitation
• if it is inherently unfair, as in profoundly more advantageous to one party than the other
• if one party was incapacitated and incapable of understanding the outcome of signing

When we’re working with a couple to draft a premarital agreement, it’s very often the first time both parties have been absolutely transparent about their financial data. And occasionally, there are surprises. But in my experience, contrary to the parties’ greatest fears, those surprises or disclosures tend to bring them closer rather than driving them apart. They have a new kind of intimacy – financial intimacy. That’s just one of the many benefits of drafting a premarital agreement.” Pamela, a client of Ashton’s, agrees. Her experience working with Ashton confirmed the decision to get a prenup. “I think the fears that come with marriage are alleviated to a large degree by a premarital agreement.”

Is there any basic advice Ashton can share? “Absolutely. We very often advocate keeping assets separate. Complete financial autonomy means both partners make their own money, retain their own separate bank accounts / credit cards / investment account, and contribute to shared expenses that are paid for through a joint account and credit card. More and more, we see couples opting for financial autonomy up front.”

Indeed, a recent Bankrate survey found that 46% of people living with a partner whether married or not choose to keep their finances separate. “That’s a significant shift,” says Ashton, “Not all that long ago, it was presumed that all assets would be commingled. In fact, even suggesting an alternative arrangement has been known to threaten an engagement. But times inexorably change, and in this case, for the better.”

If you need a Santa Clara high net worth divorce lawyer, do your research and choose a lawyer that represents your values.

Laughlin Legal Divorce and Family Law Group is a collection of some of the most skilled Santa Clara high asset divorce attorneys, child custody attorneys, and divorce and child custody mediators. They also provide a number of other custody-related services such as establishing paternity or seeking permission for relocation if a parent wants to move away with the children either during or after a divorce. Laughlin Legal is trusted throughout California for their ability to understand and secure their clients’ needs, and help divorcing parties achieve a better outcome for a better tomorrow.