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April 27, 2023
Family Law & Probate: What Are Private Equity Investments?

Are you going through a contested divorce case that involves private equity investments?

Family law attorney Carla Hartley, a renowned law expert from the Hartley Lamas law firm, brings you a wealth of experience in family law and probate spaces. Today’s video dives deep into the world of private equity investments, an increasingly digital asset class often under-looked during divorces or conservatorships.

If you’re dealing with legal matters such as divorce or probate cases, or if you’re just curious about how private equity investments work, this video is a must-watch. Join Carla Hartley as she helps you navigate the complex world of private equity investments, and be sure to subscribe for more expert advice and legal insights.

In the world of digital assets, knowledge is power. Stay informed with Hartley Lamas. If you have any further queries to discuss with our certified attorneys or seek legal counsel about a family law matter, contact Hartley Lamas et al. today at 833-647-2377.

This segment is to discuss another type of asset which is increasingly digital, and which, if you are coming into a position where you’re getting a divorce or you’re seeking support of some kind, or you have been named a conservator for a senior who likes to invest and is no longer able to tell you where everything is, you are going to want to hear about this.

My name is Carla Hartley. I’m an attorney, licensed to practice in Texas and California. And for the majority of my career, I practiced solely in family law and the probate spaces.

What Are Private Equity Investments?

Now, let’s talk about private equity investments. These are pre-initial public offering investments. You’re going to get stocks out of it or something similar to that, but it’s not going to be listed on the Nasdaq. It’s not going to be listed on the Dow Jones. It’s something that is going to be with the actual company itself, some startup company.

Imagine you invested in Microsoft or Amgen way back at the beginning when they were still in their garage and you just threw 250 bucks into it and later became a multimillionaire because you held on to that little private investment. That private investment stock becomes, at some point with many of these companies, not all. I’m not telling you to go invest in this stuff. I’m telling you how to find what somebody else invested in. There’s a big difference.

How Do You Find Private Equity Investments?

Okay. So somebody thought, ‘Oh, hey, this is a really good idea to get into this particular private equity investment’. And so they put the minimum that is required. Now, how do you find this? Again, it’s so easy with our online age. We have a number of platforms that you can go to, which are exchanges for private equity firms. One of these is Another one is Wefunder. Equifund.

These are very different and yet very similar platforms where private companies can go and say, hey, I’m going to offer shares. I’m going to offer this amount. And I want you guys to consider offering them your space. So what you do is you have to go through the Know Your Investor, Know Your Client thing. You’ve got to prove that you are able to invest in this class of shares because there are limitations. You have to have this much money coming in on a yearly basis or you have to have this much net worth in order to invest in this space.

So your senior did this, thinking, ‘Hey, this will make you big bucks later on when they eventually go public’. Or your spouse just thought, ‘No, I invested in that a couple of years ago, I’m going to wait a few years. And then after the divorce is over, I’ll have real shares from it’.

Tax Considerations

This is significant because there is a very little known statute that for certain circumstances, you can have those gains tax-free. That’s what makes this really attractive. You get in the space before it goes public. You hold the stocks before they go public. This is part of the American commitment to small business, to development, to research, all that stuff, that plays in here.

You hold it for five years. At the end of five years, you’ve got something that has hopefully gone public, increased in value, and, whoa, you now have lots of money and you don’t pay taxes on it.

Private Equity Investment Expertise

So I don’t know if you have someone who’s doing their own research or if they’re purchasing a publication that tells them what is a good investment or not, or if they’re just like, hey, I think this would be a really good idea. That is going to fall into a whole different area of analysis when it comes time to look at, do you want these shares?

But again, the first thing is you got to know they’re out there. You’ve got to know to look for them and you’ve got to find them. The thing that makes this a little more complicated is when, with some of these platforms, it doesn’t show up as the money having gone to It shows up as the money having gone to a specific investment or business.

So you have got to have someone looking over your documents that knows what they’re looking for and isn’t just thinking, hey, that’s just another thing. For instance, I was involved in a case a couple of years ago where an opposing party was having all of these expenses to a particular item or a particular vendor. And he was saying they were business expenses.

Well, one of the members of my staff happened to know that this was all firearms. These were all firearms purchases. There were firearms parts. They were firearms. It was all a gun maker, a couple of different gunmakers.

And that didn’t come across on the bank statement as arms or armor or anything like that. It came across with the name of the vendor. It’s not as exactly as lukewarm as seeing, you know, your local coffee shop repeatedly on your bank statement. But it’s one of those recurring things. And you look it up and you go, hey, this guy’s put a lot of money into this particular, in that instance, collection of concerning firearms.

So that was the opposing party, by the way, not us. We found it. We didn’t do it. And it was a long time ago. So let’s be really clear on that.

This is the kind of example I want to make for you, though. You’ve got to know what you’re looking for. You’ve got to have someone who is familiar with the financial spaces. If you have any kind of sophisticated, or shady-sophisticated, or even a wannabe-sophisticated investor on the other side of your case, there’s just no other way to say it. There are too many ways to hide income. There are too many ways to hide assets. They’re all digital.

But thanks to what we’ve recently seen in these spaces, with the Know Your Investor, Know Your Client, it’s got to come from somewhere. You just have to recognize it.

Contact Us Regarding Private Equity Investments and Family Law

You have to hire someone who can recognize it when they see it on the statement. It can come from a credit card, can come from a bank account, but they need to know what they’re looking for. I’m Carla Hartley. I hope this has been helpful.

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