Divorces are always trickier when there are larger assets involved, and this is especially true when one or both spouses have a lot of money. In high net worth divorce cases, there is more of a push to ensure that everything stays fair, more complex calculations to make for the division of these assets and debts, and frankly, just more to deal with.
However, it is important to understand the difference between a high net worth divorce and a traditional divorce in order to ensure that you are adequately represented. With a high net worth divorce, a simple mistake can lead to a wide range of negative consequences.
What Is A High Net Worth Divorce?
A high net worth divorce is, in most legal instances, a divorce where one or both spouses has over one million dollars in total assets. It is important to understand that this does not apply only to monetary funds.
This “net worth” includes assets as a whole and can be evaluated in a long list of ways. Total net worth applies to cash, retirement accounts, property investments, businesses, and notable luxury items.
Financial Preparation Is Key
In the same vein as traditional divorce cases, high net worth divorces rely heavily on showing a clear representation of the finances shared by the couple. When it comes to high net worth divorces, the financial reality of the couple is more relevant than ever.
The courts will take a long, hard look at your finances to determine what is fair between both parties, including possible spousal support. In order to prepare for this, you absolutely must overcommit. In the majority of cases, the best decision is to work with not only an experienced attorney but also an accountant or financial planner. You need someone who understands what is required and how it should be represented on a professional accounting level.
Since the finances in a high net worth divorce are one of the biggest focuses, it is important to ensure that everything is in order. You will need to provide a completely accurate and detailed representation of any and all assets. This is not only important to ensure that the divorce is fair and agreeable, but also because of the legal implications.
In the event that you are found to misrepresent your finances in any way, you can put yourself at further legal risk with the IRS, among other key organizations. Taking the time to make sure that you have accurately presented the entire financial situation that you and your spouse share is crucial. Remember, being upfront is the best way to guarantee that you receive a fair share of your total assets.
The Power of Nuptial Agreements
Though you might not have planned for a divorce emotionally, it is imperative to have done so financially before the marriage. Prenuptial agreements can be incredibly helpful when it comes to high net worth divorces to simplify the proceedings and division of assets and reduce the time and overall costs of a divorce.
As the old adage goes, an ounce of prevention beats a pound of cure – prevention being a prenuptial agreement and the cure being a fully litigated divorce. Prenuptial agreements, which detail out the separation of assets and protect certain property and business investments in advance, are usually favored by and done as a matter of course by those who enter into a marriage with money or substantial assets and/or net worth.
The Time Factor
The reality is that when you enter into a high net worth divorce process, you can expect to spend quite a bit of time managing it. Though this might seem like more of a headache than an actual problem, be aware that over time during lengthy divorce proceedings it can be extremely draining.
Even if you and your spouse are looking to end things in a relatively straightforward way, the courts take quite a bit of time when it comes to navigating high net worth divorces. There is simply more to consider in these cases, so it sometimes takes longer to ensure that everything is in good order. Prepare for a long parting, even if you are currently on good terms with your former partner.
Your Behavior Matters
For most people, divorce is a fairly touchy subject. It is completely natural for the ordeal to bring out a lot of emotions. Considering how long the process may take, tensions can continue to rise over time. Though it can be very difficult to go through this process, it is important to remain on your best behavior.
At the point where you file for a high net worth divorce, your behavior inside and outside of the courtroom will matter more than ever. You must remain civil in every way and find healthy ways to vent any frustrations away from your partner. The reality is that bad behavior or being difficult in court will, more often than not, work against you and may even affect how assets are divided.
Child Support Rules Differ
One unexpected component of high net worth divorces is the difference in child support. In a traditional case, child support is more about ensuring that the child is well-cared for. In a high net worth divorce, the cost may go beyond that to ensure that the child(ren) enjoy the same standard living and opportunities for education and the like that they would have enjoyed absent the divorce.
In most divorce cases, there are guidelines or a simple algorithm that can be followed to ensure that the child is getting a fair amount. In a high net worth divorces, child support becomes less about simply supporting the child and more about what is fair given what one or both partners make and can provide.
High Net Worth Divorce Summary
High net worth divorces are tricky in court, but they are not by any means impossible. In the event that you and your former partner are entering into a divorce involving a lot of assets, you should seek the advice of a divorce lawyer that specializes and has experience dealing with high net worth divorces.
To learn more about how your best move forward with your high net worth divorce, contact the attorneys at OWENS & PERKINS by calling our office at 480.994.8824 or click here to schedule your FREE 30-minute legal consultation.