Going through a divorce can be a difficult process for anyone. From dealing with the division of assets to determining child custody, the process can become exhausting. A divorce can become even more extensive when adding the complexities of whether one or both individuals have a high income or net worth. In situations such as this, it can be essential to prepare yourself and use the resources available to help guide you through this process.
What is a High Net-Worth Divorce?
The traditional definition of a high-net-worth divorce is one in which the net liquid assets exceed one million dollars ($1,000,000.00). This amount has increased dramatically, and more cases today involve multimillion-dollar settlements. According to Moradi Saslaw, a San Francisco law firm that specializes in divorce, only a few divorces or custody arrangements are simple and straightforward. Having complex assets – such as business interests, stock options, trusts, fine art pieces, or multiple homes – can make your case more complicated.
Considerations When Filing a High Net-Worth Divorce
Dividing assets is a routine part of any divorce and compiling an up-to-date list can be essential in cases involving high net-worth individuals. Since California is a community property state, it means most of the assets acquired during the duration of the marriage are to be split equally. An asset can be defined as anything that has a real value such as tangible items like cars and property or less common forms like intellectual property.
Prenuptial (and Postnuptial) Agreements
If there have been any prenuptial or postnuptial agreements, they may be used as a means to reduce some of the financial complications associated with the divorce process. A prenuptial agreement, more commonly known as a “prenup”, is a contract that a couple acknowledges before the marriage which states mutual terms of a divorce as it relates to dissolution. A postnuptial agreement, more commonly known as a “postnup”, is essentially a prenup that is created after the marriage.
Spouse and Child Support
In the event that one spouse is found to be dependent on the other, there is a case for spousal support. It is important to acknowledge the duration of these payments as they could potentially become long-term if the court decides so. Additionally, if there is a child involved, there is the matter of determining custody and whether the other party must make payments to support that child. In a high net-worth divorce case these factors can lead to expensive payments if awarded by the court so be sure to have a legal professional assist you.
Tips For a High Net-Worth Divorce
Although no one plans for their marriage to lead to a divorce, some things eventually become inevitable. If you feel your marriage is heading for a divorce it may be beneficial to speak with an attorney sooner than later. Besides the process of a high-income divorce settlement being complex enough, being unprepared can make things worse. Make a plan for assets, spouse or child support payments, and child custody if applicable.
Consult a Financial Professional
Aside from being sure to find a legal professional to help you navigate the complexities of a high net-worth divorce, hiring a financial professional can also be a smart investment as well. The many tax consequences associated with a divorce can become complicated and sitting down with an accountant might just be able to understand the value of the assets you plan on splitting or letting go of.
Don’t Try to Hide Any Assets
One of the main parts of divorce is compiling a list of assets to be divided between the two parties. The mistake of hiding assets can lead to serious consequences in terms of division to be set by the court as well as possible legal repercussions as well. Being honest will not only lead to a better financial outcome but also prevent any legal issues going forward.
Should You Hire a High-Income Divorce Lawyer?
Most cases involving a divorce call for an experienced attorney, but when you’re a high net-worth individual it is imperative to have a legal professional on your side to help you navigate the legal process. In order to protect yourself in these situations, it is best to take these considerations to help you get through a divorce as quickly and painlessly as possible. A divorce can be one of the most difficult parts of anyone’s life and the sooner you get through it the better.