February 20, 2024

Every divorce can be challenging, but for couples who are splitting high-value assets, a divorce can become really complex. Without a prenuptial agreement, both spouses may be concerned about how best to protect themselves, their standard of living, and their financial future when filing for divorce. While spousal support has a customary calculation in most cases, things are slightly different when the divorcing couple has a high net worth. It’s in your best interest to find an attorney who understands how to work with your unique situation to ensure that you are protected during and after your divorce.

How is Spousal Support Calculated?

There are two factors in spousal support – how much will be included in the payment and how long the payments will last after the divorce is finalized. Spousal support is calculated by looking at several factors, including each spouse’s income, each spouse’s earning ability, each spouse’s age and physical condition, the current education of each spouse, the required training and education needed for one spouse to obtain employment, the duration of the marriage, the assets and liabilities of both spouses, and the standard of living the couple has had leading up to the divorce. The factors that have the biggest impact are the difference in income and length of marriage. A longer marriage will often result in a larger spousal support amount. Spousal support is almost never for an indefinite period of time, except in the cases of marriages of 20-30+ years, but is usually awarded for a period of one-third of the length of the marriage, and is terminated when the spouse receiving support remarries. In many cases, temporary support is ordered during the divorce process, but may or may not be similar to the amount awarded when the divorce is final.

Who Qualifies for Spousal Support?

The purpose of spousal support is to compensate one spouse for lost wages or the loss of the ability to earn wages and was developed during a time when many wives did not work outside of the home and would be financially ruined in the case of divorce, forcing spouses to stay in an unhappy marriage. However, in recent years, spousal support is more an issue of equitability and maintaining the same standard of living for both spouses during the divorce process. In most cases, the spouse who earns less during the marriage will qualify for spousal support, regardless of gender. Spousal support is also common when one spouse has been out of the workforce, cannot work because of illness or injury, has limited job skills or education, or has paid for the other’s education or medical bills prior to the divorce.

Can Spousal Support Agreements Be Modified?

Spousal support is there to ensure that both spouses are financially stable after a divorce and are not intended for one spouse to “profit” from the other or “punish” a spouse for anything that happened during the marriage. Asking for an agreement to be modified after the fact simply because one spouse determines they don’t like the agreement is usually not possible. For example, if one spouse has an increase in earnings after the completion of divorce, the spousal support order is not usually modified to reflect the change simply because the payer could afford more or the payee needs less.

However, if a change in circumstances is substantial and makes the existing agreement no longer reasonable, the agreement can be modified. Two examples are a significant loss of income from the spouse who is paying support, or cohabitation from a spouse who is receiving support. A modification will have to go through the court system, and your attorney can advise you on the possibility of a modification and what evidence you will need for your claim.

How Does Spousal Support Differ in a High Asset Divorce?

If a couple has significant income or assets, the way spousal support is calculated is often different from the usual formula. Although spousal support will still be determined by the length of marriage, age, and health of each spouse, current and future earning potential, and standard of living during marriage, there are differences. Rather than a standard calculation, the judge has sole discretion in determining the amount. Because this can cause uncertainty for both parties, most couples involved in a high asset divorce will attempt to reach an agreement with their attorneys.

Both spouses need to make sure that they have disclosed their entire financial picture, as hiding assets can have expensive consequences. In some cases, lump sum spousal support, which is also known as a spousal support buyout, may be considered. This can be beneficial to both spouses, as it provides finality to the process and ensures that both spouses can move forward without concern about a change in circumstances. However, because this does differ from standard spousal support, both spouses need to be very aware of the long-term implications.

High asset divorces can be contentious, as the stakes are high for both parties. If you are going through a high asset divorce, it’s important to work with a local divorce attorney who has experience navigating the complexities of asset division and spousal support with high asset couples. Your attorney can work with your unique situation and ensure that you are financially protected now and in the future. If you’re filing for divorce and are in need of experienced legal representation, contact my office today.