Understanding how financial discovery really works in NYC high-net-worth divorces is important for individuals facing disputes involving substantial assets, business interests, or complex income structures. Financial discovery is a phase of divorce litigation during which both spouses exchange information and documentation regarding income, assets, liabilities, and other financial issues.
Discovery in New York City high-asset divorces often involves investment portfolios, executive compensation, real estate holdings, privately owned businesses, and hidden asset concerns. Discovery may be highly detailed, particularly in more complex marital estates and where there are disagreements as to valuation, disclosure, or ownership of specific assets.
Hire a High-Net-Worth Divorce Lawyer
Clients at The Levoritz Law Firm work directly with Yoni Levoritz in high-asset divorce cases involving complex financial discovery and contested litigation. The firm’s clients include executives, business owners, physicians, attorneys, and other high-income earners throughout New York City.
Cases typically involve extensive financial records and account statements, business valuations, investments, deferred compensation, and contested marital assets. We prepare for and handle each case with the detail-oriented preparation and litigation-focused mindset necessary to spot financial issues early in the process and position clients from the start.
What Financial Discovery Means in a New York Divorce
Financial discovery is the process by which spouses exchange information and documents related to income, assets, debts, and other financial issues during the course of divorce litigation. Discovery is sometimes necessary in high-net-worth divorces before the scope and value of the marital estate can be identified and determined, and before issues involving property division or support can be addressed.
Financial disclosure in New York divorce cases is also subject to the general requirements for exchanging information in litigation set forth in New York Civil Practice Law and Rules Article 31.
Discovery may also be necessary to identify any inconsistencies between financial disclosures and actual financial activity. In many New York divorces, information gathered during the discovery phase of a case can be important evidence used in negotiations, settlement discussions, and in court on financial issues.
Documents Commonly Requested During Financial Discovery
Discovery in financial divorce cases usually involves the production of a large number of documents by both spouses. Tax returns, bank statements, records from brokerage accounts, statements from retirement accounts, mortgage records, loan applications, and credit card statements are some of the more typical documents that are produced in discovery.
Certain divorces also involve discovery related to business ownership records, partnership distributions, stock options, bonuses, and deferred compensation. Discovery in divorces involving finance professionals or business owners can include even more types of documents.
In Manhattan divorces, discovery can include partnership agreements, carried interest, and other compensation based on investment performance. Reviewing these documents allows parties to better understand household finances and evaluate allegations concerning income or property ownership.
How Discovery Disputes Can Delay Divorce Proceedings
Disputes over financial discovery can have a major impact on the timeline of a high-net-worth divorce case. Time can be lost when one spouse withholds requested financial records, fights about the scope of document requests, or argues over whether particular financial information is relevant.
The Centers for Disease Control and Prevention reports that there were 673,989 divorces and annulments in the U.S. in 2022. Divorce filings continue to contribute to active family court caseloads across the country.
Occasionally, attorneys need to subpoena witnesses, file motions to compel disclosure, or make court requests about missing documents. In cases where financial records are missing or hard to get, settlement negotiations and litigation can take much longer.
FAQs
Which Court Handles Divorce Cases in Manhattan?
In Manhattan, divorce cases are litigated in the New York County Supreme Court, which is the trial-level court that has jurisdiction over matrimonial actions, which include divorce, custody, child support, and equitable distribution.
A contested high-asset divorce filed in Manhattan can entail voluminous financial disclosure, motion practice, and court conferences before a case is resolved. The timeline of a contested case can be affected by court scheduling, discovery issues, and valuation disputes.
Can Hidden Assets Affect a New York Divorce Case?
Hidden assets can have a material impact on a divorce proceeding since undisclosed accounts, transfers, or income can change determinations on property division and support. Subpoenas, forensic accounting analysis, and depositions have been used as discovery tools to examine unusual financial activity.
Courts may examine spending patterns, business records, or suspicious transfers when a party in a divorce case has alleged that the other spouse hid marital assets.
What Happens if a Spouse Refuses to Provide Financial Records During Discovery?
A court may order further disclosure if a spouse fails to provide requested financial records. Penalties may be imposed for failure to produce financial records as ordered. In litigation, the parties’ attorneys may file motions to compel discovery when important records are withheld.
Judges may make adverse inferences from incomplete disclosures or preclude certain claims at trial. Disclosure of financial information may be a condition precedent to the court’s ability to review property division, support, or other disputed financial issues.
How Common Is Divorce in New York?
In 2023, New York’s state government reported 2.4 divorces per 1,000 population, based on preliminary data from the Centers for Disease Control and Prevention. Family court proceedings for divorces in the state are ongoing for many families, including those with significant assets, shared businesses, and lengthy financial commitments.
High-net-worth divorces can involve lengthy financial discovery before other matters, such as support or property division, can be addressed.
Contact an NYC High-Net-Worth Divorce Lawyer
Financial discovery may impact the trajectory of a high-net-worth divorce, including how various forms of income, assets, debts, and property interests are located and assessed. Discovery tends to become more comprehensive and nuanced in divorces in which the parties own a business, have investment accounts or executive compensation, or if either party’s financial disclosure is being questioned.
It is helpful to understand how the discovery process works when preparing for divorce-related negotiations, litigation, and long-term financial decisions. The Levoritz Law Firm provides clients with direct representation in high-asset divorce cases with significant marital estates and complex, contested financial issues throughout New York City. Call our office to request a confidential consultation and hire a high-net-worth divorce lawyer today.
