The previous spouse of IEQ Capital co-founder Eric Scott Harrison is accusing him of getting undertaken a “nefarious scheme” to disclaim her rights to their most useful asset in a divorce settlement—an fairness stake within the $26 billion AUM RIA—and the “tens of thousands and thousands” in money that got here from promoting a portion of the agency to personal fairness buyers Stone Level Capital.
Anne Louise Harrison filed her lawsuit final month in California’s San Mateo Superior Court docket, alleging that by inserting the IEQ fairness stake into an irrevocable belief and naming their kids as beneficiaries, Harrison deliberately moved the asset past her attain in divorce proceedings. She accuses Harrison of forging her signature on paperwork to facilitate the switch, and claims he made the switch figuring out each a sale of the agency and the couple’s separation is likely to be close to.
“(Eric) believed that, by transferring almost the entire couple’s acquired wealth to the irrevocable trusts pursuant to the scheme, he might keep away from a protracted combat in any future divorce continuing over the allocation and distribution of these belongings,” the go well with learn.
To make sure, irrevocable trusts are a typical element of property planning methods, notably for entrepreneurs. By naming the household’s kids as beneficiaries, Harrison additionally provides up his declare to the belongings whereas reducing the property’s worth for tax functions.
Attorneys for Eric Harrison and Anne Harrison declined to touch upon the continued proceedings. A supply near Eric Harrison mentioned there was nothing nefarious about using the generally used trusts and that signatures on the property planning paperwork had been notarized, making a forgery unlikely.
Eric Harrison is a co-founder and managing accomplice of San Francisco-based IEQ Capital. He and co-founders Alan Zafran and Rob Skinner beforehand co-founded Luminous Capital (together with David Hou and Mark Sear), a $5.5 billion RIA that bought to First Republic in 2012.
The trio left First Republic in 2019 and fashioned IEQ, whereas Hou and Sear created the Los Angeles-based Evoke Wealth.
In January 2023, IEQ bought a minority stake to personal fairness agency Stone Level Capital, and the belief acquired a “important money payout, tens of thousands and thousands of {dollars}, for these pursuits,” in accordance with the lawsuit.
Anne Harrison claims Eric Harrison was not solely her husband but additionally her wealth supervisor, which, the go well with factors out, mandated “a fiduciary responsibility of care.” The go well with claims that in 2016, her husband proposed a “complicated and allegedly helpful” property planning technique that might create irrevocable trusts for the couple’s youngsters and different beneficiaries. Anne Harrison mentioned she deferred to her husband on the transfer and the choice to call IEQ co-founder Alan Zafran and Eric’s sister-in-law as trustees.
The go well with claims that “almost all” of the couple’s belongings had been ultimately moved into these trusts, placing her ex-husband “within the strongest doable monetary place” if the couple divorced, as the one situation at stake in divorce proceedings can be Anne Harrison’s spousal assist.
In line with the go well with, she claimed her husband can be safe after a divorce with an $8 million wage and distributions from the IEQ Capital possession stake. As a “longtime homemaker,” Anne Harrison believed she can be depending on Eric Harrison for post-divorce funds.
“Eric clearly acknowledged this energy imbalance and concluded that, by exploiting his leverage, he might deliver Anne to heel in any future divorce settlement negotiations,” the go well with reads.
By 2019, Harrison instructed his spouse that they need to transfer their fairness stake in IEQ Capital into the established trusts, because the agency might “in the future be a goal for acquisition” by a bigger firm, doubtlessly netting the couple a major monetary windfall.
In line with her go well with, she balked at this suggestion, claiming she was uncomfortable transferring away their “most useful belongings.”
She alleges that Eric Harrison did so anyway, forging her signature and transferring greater than 30% of the couple’s stake with out telling her.
In 2020, Eric Harrison requested his spouse to conform to switch the rest of the fairness into the trusts, promising that if the couple separated, she would have authorized entry to his wage and possession distributions to make sure her “marital way of life.”
Anne Harrison “reluctantly agreed” to the switch, in accordance with the go well with.
The supply near Mr. Harrison argued that Ms. Harrison’s concern over a few of the proposed wealth transfers undercut her assertion that she was financially unprepared for contemplating such points.
In 2023, the couple separated, and Anne Harrison says she later “found” she’d been “fraudulently induced” by her ex-husband to conform to the switch, and that Harrison “wouldn’t make sure that Anne had entry to the total quantity of his $8 million annual wage and homeowners’ distributions for monetary assist so she might preserve her marital way of life.”
“Eric was clearly conscious that the scheme would have these dire monetary repercussions for Anne as a result of, in a uncommon second of candor, he callously acknowledged in a November 19, 2020 e-mail: ‘we gifted all possession in IEQ to our children, nieces and nephews, leaving Anne broke … so unhappy,’” in accordance with the go well with.
Anne Harrison claims within the go well with that the couple’s grownup kids “haven’t any objection” to her pursuit of the contents of their irrevocable trusts.
