The former wife of IEQ Capital co-founder Eric Scott Harrison is accusing him of having undertaken a “nefarious scheme” to deny her rights to their most valuable asset in a divorce settlement—an equity stake in the $26 billion AUM RIA—and the “tens of millions” in cash that came from selling a portion of the firm to private equity investors Stone Point Capital.
Anne Louise Harrison filed her lawsuit last month in California’s San Mateo Superior Court, alleging that by placing the IEQ equity stake into an irrevocable trust and naming their children as beneficiaries, Harrison intentionally moved the asset beyond her reach in divorce proceedings. She accuses Harrison of forging her signature on documents to facilitate the transfer, and claims he made the transfer knowing both a sale of the firm and the couple’s separation might be near.
“(Eric) believed that, by transferring nearly all of the couple’s acquired wealth to the irrevocable trusts pursuant to the scheme, he could avoid a protracted fight in any future divorce proceeding over the allocation and distribution of those assets,” the suit read.
To be sure, irrevocable trusts are a common component of estate planning strategies, particularly for entrepreneurs. By naming the family’s children as beneficiaries, Harrison also gives up his claim to the assets while lowering the estate’s value for tax purposes.
Attorneys for Eric Harrison and Anne Harrison declined to comment on the ongoing proceedings. A source close to Eric Harrison said there was nothing nefarious about employing the commonly used trusts and that signatures on the estate planning documents were notarized, making a forgery unlikely.
Eric Harrison is a co-founder and managing partner of San Francisco-based IEQ Capital. He and co-founders Alan Zafran and Rob Skinner previously co-founded Luminous Capital (along with David Hou and Mark Sear), a $5.5 billion RIA that sold to First Republic in 2012.
The trio left First Republic in 2019 and formed IEQ, while Hou and Sear created the Los Angeles-based Evoke Wealth.
In January 2023, IEQ sold a minority stake to private equity firm Stone Point Capital, and the trust received a “significant cash payout, tens of millions of dollars, for those interests,” according to the lawsuit.
Anne Harrison claims Eric Harrison was not only her husband but also her wealth manager, which, the suit points out, mandated “a fiduciary duty of care.” The suit claims that in 2016, her husband proposed a “complex and allegedly beneficial” estate planning strategy that would create irrevocable trusts for the couple’s kids and other beneficiaries. Anne Harrison said she deferred to her husband on the move and the decision to name IEQ co-founder Alan Zafran and Eric’s sister-in-law as trustees.
The suit claims that “nearly all” of the couple’s assets were eventually moved into these trusts, putting her ex-husband “in the strongest possible financial position” if the couple divorced, as the only issue at stake in divorce proceedings would be Anne Harrison’s spousal support.
According to the suit, she claimed her husband would be secure after a divorce with an $8 million salary and distributions from the IEQ Capital ownership stake. As a “longtime homemaker,” Anne Harrison believed she would be dependent on Eric Harrison for post-divorce funds.
“Eric clearly recognized this power imbalance and concluded that, by exploiting his leverage, he could bring Anne to heel in any future divorce settlement negotiations,” the suit reads.
By 2019, Harrison told his wife that they should move their equity stake in IEQ Capital into the established trusts, as the firm could “one day be a target for acquisition” by a larger company, potentially netting the couple a significant financial windfall.
According to her suit, she balked at this suggestion, claiming she was uncomfortable transferring away their “most valuable assets.”
She alleges that Eric Harrison did so anyway, forging her signature and transferring more than 30% of the couple’s stake without telling her.
In 2020, Eric Harrison asked his wife to agree to transfer the remainder of the equity into the trusts, promising that if the couple separated, she would have legal access to his salary and ownership distributions to ensure her “marital standard of living.”
Anne Harrison “reluctantly agreed” to the transfer, according to the suit.
The source close to Mr. Harrison argued that Ms. Harrison’s concern over some of the proposed wealth transfers undercut her assertion that she was financially unprepared for considering such issues.
In 2023, the couple separated, and Anne Harrison says she later “discovered” she’d been “fraudulently induced” by her ex-husband to agree to the transfer, and that Harrison “would not ensure that Anne had access to the full amount of his $8 million annual salary and owners’ distributions for financial support so she could maintain her marital standard of living.”
“Eric was clearly aware that the scheme would have these dire financial repercussions for Anne because, in a rare moment of candor, he callously acknowledged in a November 19, 2020 e-mail: ‘we gifted all ownership in IEQ to our kids, nieces and nephews, leaving Anne broke … so sad,’” according to the suit.
Anne Harrison claims in the suit that the couple’s adult children “have no objection” to her pursuit of the contents of their irrevocable trusts.
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