August 28, 2024

Even when a divorce is the right decision, it is still an emotionally and logistically difficult time. Going through the divorce process and asset division is always stressful, but when the financial stakes are high, it can be even more overwhelming and complicated to navigate.

A high net worth divorce is defined as one where the divorcing couple has over one million dollars in assets that will be subject to negotiation and division. This does not only include liquid assets that can be easily cashed out, but often includes real estate, business ownership stakes, investment portfolios, and significant material assets. Your attorney will need to understand complex financial situations, have knowledge in areas dealing with business valuations, tax implications, and negotiation, and have ample experience in high net worth divorce cases. Finding the right attorney for your high net worth divorce is not simply important for getting you through the divorce process, but the attorney you choose can also impact your financial future.

What Are the Unique Challenges of a High Asset Divorce?

The most obvious challenge of a high net worth divorce is the amount of assets that will need to be accounted for, verified, and divided equitably. In some cases, there will be a pre or post nuptial agreement in place that will make asset division easier, but if the assets were obtained later in the marriage, there is likely no agreement in place to protect either party. Both parties will have a vested interest in protecting themselves and their financial future, and this can occasionally result in some poor behavior from one or both spouses during the process of gathering and documenting assets.

Some spouses in a high net worth divorce may attempt to hide certain assets during the divorce, and this can have serious consequences. This is often because some spouses involved in high assets divorces have a sense of entitlement about who “earned” the assets and will allow that to drive their negotiations. Your attorney, therefore, will need to make sure that all assets are appropriately cataloged. This may include having a specialized accountant to track all financial movements and uncover every asset.

Is That a Marital Asset?

Another challenge during asset division is distinguishing between marital assets and separate assets. By strict legal definition, separate assets are ones that are acquired by one spouse only, either before the marriage, through an inheritance, or as a gift. These assets are not subject to division. Marital assets are any assets that were acquired during the marriage and are subject to division, even if they were primarily obtained by one spouse. Assets may be initially classified as separate, but then lumped in with marital assets or put into a joint account. It is also important to consider the challenge of tax implications with asset division. Liquidating each asset so it can be divided equally can have significant tax consequences, and this is something your attorney will need to have experience with. In many cases, particularly if there is a business at stake, assets may be divided in a way that allows each asset to remain whole.

Child and Spousal Support in a High Net Worth Divorce

The higher the financial stakes of the divorce, the more contentious child and spousal support may be during the process. When determining the amount for child and spousal support, the judge will consider each spouse’s income and earning potential. In a high net worth divorce, the judge will also consider the current standard of living and the ability to maintain that standard after the divorce.

Do You Need a High Asset Divorce Attorney?

High net worth divorces can be complicated, and when the stakes are high during an already unpleasant process, having an experienced high net worth divorce attorney can help make the process a little bit easier and a lot less stressful.

Finding an attorney who understands the challenges of divorcing with significant assets can make navigating those challenges easier and will help protect those assets so you can move forward with less financial stress. You need an attorney who can guide you through a negotiation strategy that focuses on the big picture and long-term success. In most cases, taking the divorce to litigation will hurt both parties financially as well as draw out the process, and your attorney will be cognizant of this and protect as much of the assets as possible. While an overly aggressive lawyer may give you the fight you want emotionally, it will also cost you greatly in attorney fees. Therefore, you need to choose your attorney carefully.

The first step is to look for an attorney with ample experience in divorces like yours. Look for an attorney with professional relationships with tax professionals, forensic accounts, and business valuation specialists who will ensure that every asset is considered, counted, and split in a financially smart way that allows both you and your spouse to move forward with financial security.

Look for an attorney who will strive for an amicable, equitable, and fair settlement. During your initial consultation, ask your prospective attorney about their track record in cases similar to yours and their strategy for getting you through the process. With an experienced and knowledgeable attorney, you can get through the unique challenges of a high net worth divorce and successfully move on. If you’re going through a divorce and you don’t know what your next steps should be, contact my office today.