High Net Worth Divorce and Arbitration / by Cassandra Hearn

Each type of divorce or family law case has its own unique set of complications.  Divorces involving a large amount of assets are no exception to this.  In high net worth cases, there is often a large diversity of assets that must be divided, ranging from family businesses to stocks to real estate.  Each different type of asset will have its own properties and issues that are exclusive to that type of asset, and which must be addressed before the asset can be appropriately divided.  This becomes even more complicated where the asset was owned before marriage and the parties must litigate what, if any, portion of the asset has become community property.  Arbitration may provide a method by which the spouses can seek resolution to their case, even though there are probably many complicated facts and issues.

Arbitration is not the same as mediation.  In mediation, there is a neutral third-party mediator who simply attempts to facilitate an agreement between the spouses.  Arbitration, however, involves a neutral third-party whose role it is to actually examine the facts and then make a decision for the parties, much like a judge.  Arbitration can be binding or non-binding.  If arbitration is binding, typically the decision of the arbitrator is final and cannot be appealed.    

Arbitration is often appropriate in those cases where there are complex issues.  High net worth divorce often will fit this bill.  For example, dividing a family business where inventory, community reputation, and assets all must be considered is clearly more complicated than simply dividing the equity from a marital residence.  Arbitrators often have specialized training in the area of law in which they offer their services, which provides an extra advantage when dividing complicated financial assets.

Arbitration also has the advantage of privacy.  While a court room could potentially be closed to outsiders if the judge orders it, arbitration will never be open to outside observers.  Documentation produced at arbitration will not be included in a court’s file, which is typically public record.  Arbitration can also provide closure quicker than a trial, as the parties have more control over when the arbitration can take place.

Arbitration is not right for every case, but it may be right for yours. Call us today at 619-800-0384 and let us talk with you about your assets and your options.