Seven-time Superbowl-winning quarterback Tom Brady and his wife, Gisele Bündchen, announced that their divorce was finalized on October 28th. The couple’s divorce comes after months of rumors that Gisele was unhappy with Tom’s choice to return to football after promising to retire. While the couple’s divorce settlement has not been publicly released, the speed of their split implies that they collaborated on the settlement.
Considering the couple’s massive estate, negotiation may have been critical to avoid the years-long legal battles celebrities like Arnold Schwarzenegger faced. As one of the best football quarterbacks in history, Tom has amassed approximately $333 million. While possibly less well-known in the US, Gisele is worth even more, with an approximate net worth of $400 million.
The couple has invested their joint net worth of $733 million in many ways. They share ownership of a $17 million mansion in Florida, a vacation getaway near Yellowstone in Montana, a sprawling complex in Costa Rica, and a New York luxury condo worth $3.6 million. In addition, the couple reportedly has millions invested in their individual businesses and significant investment portfolios.
At the moment, the fate of each property is not known with any certainty. They may have decided to sell them instead of debating over who will keep what. Selling the properties reduces the potential conflicts caused by interstate asset division and ensures they each receive their fair share of the value invested. It remains to be seen exactly what that split will be.
Tom and Gisele are far from the only people who must consider how to divide property across state lines during a divorce. These interstate property concerns are known for making high-asset divorces more complex. If you have a vacation home or family property in another state, it’s critical to address how it will be divided early in your divorce to prevent delays. Here’s what you need to know about how these properties may be split and how to handle multi-state asset division smoothly.
Dividing Assets Across State Lines
Many high-net-worth couples own property in multiple states. This can be as simple as a car you store with a relative for when you visit or as complex as a multi-million-dollar vacation home or businesses incorporated in different states. In all these situations, the court has to answer the same question: which state has jurisdiction over the property?
Jurisdiction is a fundamental concern in every divorce. The court with jurisdiction over your split is the one that is eligible to make decisions and issue legally binding orders about it. This matters because different states’ laws vary significantly regarding how property should be divided in divorce.
For example, California is a “community property” state. Every divorce in California is held to community property laws unless a prenuptial or postnuptial agreement sets up a different framework. These laws state that all assets a couple acquires during their marriage are community property that must be divided equally between partners, regardless of how it was obtained. Unless a couple negotiates a different split, both spouses will walk away with half of the marital assets.
Other states, such as Florida, are “equitable distribution” states. There, spouses are not automatically entitled to half of the marital assets. Instead, judges determine an “equitable” division that considers each spouse’s contributions to the marriage. This may allow higher-income partners to retain significantly greater portions of the joint assets than their spouses. Clearly, these laws can make all the difference regarding interstate asset division, so it’s critical to determine which state has jurisdiction over the property in question.
There are several ways jurisdiction over property may be determined in a divorce. The most common is through personal jurisdiction. If a person lives in the state and owns property, the state may have jurisdiction over that property regardless of its location. So, if you and your spouse both live in California, it is likely that California has jurisdiction over the vacation home you jointly own in Florida.
However, this can be complicated if you live in separate states. If you live in California and your spouse lives in Florida, California only has personal jurisdiction over you, while Florida has personal jurisdiction over your spouse.
In this case, either state may have authority over the Florida vacation home through In Rem jurisdiction. It allows any state where a person meets the residency requirements to dissolve their marriage on their behalf, regardless of where their spouse lives. This prevents couples who have separated from becoming trapped in a marriage. Through In Rem jurisdiction, the court in which the divorce is filed will most likely have the authority to issue orders about the couple’s property even if one partner is out of state.
For this reason, it’s critical to file for divorce first if you’re concerned about other states’ laws harming your settlement. Filing in California ensures that the state’s community property laws apply to your joint assets and that you receive your fair share of the value of property in other states. By filing first, you prevent your spouse from filing a duplicate case in their new home state and guarantee that the case will be handled under California’s laws.
Separate as Smoothly as Tom and Gisele
Tom and Gisele’s divorce could have been extremely complicated, but the couple handled it smoothly. You can accomplish the same by consulting with experienced divorce attorneys like the team at Kaspar & Lugay, LLP. Our knowledgeable lawyers have years of experience helping couples resolve disputes in high asset divorces, handling interstate property division concerns, and keeping the process streamlined and low-stress. Learn more about how we will advocate for you in your divorce by scheduling your consultation today.