Divorce is never a simple process. From the emotional toll that it can take on both parties to the financial strain, it can often leave anyone unraveled. For individuals with a higher net-worth and more financial assets, the process can be even more complicated.
High asset divorce cases can be complex. With more assets to divide, there’s far more to gain or possibly lose. Couple this fact with the existing difficulties of divorce, and it could be a recipe for a difficult separation. However, knowing what to expect and how to prepare can leave both parties in a much better position. Perhaps the best place to start is with a reputable attorney. A reputable attorney is not only someone who has their hiring party’s best interests in mind and will protect their future, they are knowledgable about the party’s rights and the law to support their client’s interests.
The best way to prepare is to be well informed. Over the years, M. Sue Wilson has seen many high asset divorce cases and learned valuable lessons. Every divorce, whether high asset or not, will include common elements such as the following:
- Spousal maintenance,
- Division of marital property
- Financial considerations
- Child custody
- Child support
For example, one of the most cumbersome aspects of a high asset divorce is a complicated financial network. Before a divorce begins, critical financial documents should be located and protected. During a divorce, belongings get divided, and finding financial documents like tax returns can be a nightmare.
Part of the complexities that high asset divorce cases have it that there are many assets. Without an acute understanding of the amount and location of assets, this can lead to unwanted surprises or elongated settlements.
Community vs. Separate Assets
Knowledge of the parties’ assets is only a piece of the puzzle. There are also various types of assets. Community or marital assets typically define what has been earned or acquired during a marriage. However, prenuptial agreements may have specific stipulations that state otherwise.
Separate assets (or non-marital property) belonging to individuals usually include the following:
- Property owned by one spouse before the marriage
- Inheritances that a spouse received before or during the marriage
- Gifts that a spouse receives before or during the marriage
- Property that is either acquired in one spouse’s name, separated in writing, or purchased with one spouse’s assets to keep separate
Sometimes assets that would otherwise be considered separate (or non-marital) have been commingled with assets that are marital property. High net-worth individuals typically need to trace separate assets during a divorce if these assets were at any point commingled with marital property. If both parties have access to proper documentation regarding separate and community assets before a divorce, it can relieve some of the dilemmas that usually arise.
Probability of a Contested Divorce
Individuals with higher net-worths are in a much better position to contest community assets. It becomes a comparison between how much legal representation may cost and what assets they stand to receive from the dissolution proceeding. If the assets they may receive are far higher than the cost of the divorce, the marital dissolution has a greater opportunity to be contested.
Another significant component of a high asset divorce is determining the value of the assets in question. Valuation appraisers are typically needed for estates of a certain size and complexity. Each spouse will need their own expert to determine a particular asset’s worth. These appraisers can also help locate assets that may be missing or are typically overlooked.
All of this deliberation takes time. If spouses do their due diligence to locate financial paperwork and the origin of assets in question — a significant amount of cost can be mitigated.
Prepare for Out-of-State or International Assets
High net-worth Individuals tend to have multiple assets in many forms. More often than not, these assets can be found in other states or even outside of the country. Foreign or out-of-state assets typically need more attention and expert care and thus early counsel on the disposition of these assets should be sought.
Spousal Maintenance Payments
Depending on the size of the estate or the assets in question, spousal maintenance may be more complex with a high asset divorce. In a traditional divorce situation, financial knowledge and asset knowledge is already complicated. In situations where the estate is quite large, uncovering the full scope of financial circumstances for both parties can be challenging and contentious. It’s not unusual for individuals in high asset marriages to conceal bank accounts, property, or assets from their partner. Unearthing these assets during a divorce can affect spousal maintenance.
Find the Right Attorney
A high asset divorce needs an attorney that is well-versed in the various complexities of the case and the law. From the tumultuous nature of a high net-worth marital dissolution to the messy financial unravelings that inevitably ensue — an experienced family law attorney can make a significant impact on the results of a case. The right attorney needs to be prepared for the unexpected hoops that they may have to jump through during the case.