Divorce is one of the most difficult life changes you can go through. High net worth divorce adds its own unique challenges, involving significant assets and complex financial considerations.
During the emotional turmoil of a dissolution of a marriage, property division, and spousal support can be particularly contentious. Protecting assets in a high net-worth divorce becomes critical. When the status of your financial future is at stake, you need to be aware of the scope of challenges you could be facing.
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Protecting Assets in a High Net-Worth Divorce
To ensure a fair settlement in the divorce process and prevent financial ruin, you must carefully consider how you will protect assets in a divorce. Determining asset valuation that can be supported by competent and substantial evidence is critical, and then strategically planning the distribution of the assets and debts are very important for your financial future.
Are you concerned that you may not be aware of all the assets that your partner possesses? You are not alone. It is common for individuals to hide assets in non-disclosed bank accounts, offshore accounts, and safety deposit boxes. Forensic accountants can be a highly valuable resource in a high net-worth divorce. They specialize in investigating and exposing the true financial picture of an individual.
A forensic accountant utilizes precise processes to analyze financial records and can provide expert testimony to ensure a fair settlement. The divorce attorney can work with them to identify hidden assets and uncover financial discrepancies. Bringing in a forensic accountant in a high net worth divorce is advisable and can make a huge difference in the ultimate settlement.
Property Division
Property division in divorce is quite complex because high net-worth couples often have various types of physical property and financial assets. This can include real estate (residential or investment), valuables (such as luxury vehicles or jewelry), financial accounts and investments, and executive compensation and benefits.
The property division will be determined by multiple factors, including what property and financial assets belonged to each person before the wedding (pre-marital property) and what was acquired during the length of the marriage (marital property). The Court determines equitable property division in divorce, a fair allocation based on the law. Florida is an equitable distribution state, the court must begin with the premise that the distribution should be equal unless there is a justification for an unequal distribution based on all relevant factors outlined in the statute.
Accurate financial statements and asset valuation are critical to obtaining an equitable, fair property division in a high net-worth divorce. Real estate and high-value luxury items should be appraised to determine the full value.
Important note: any jointly owned property would be considered part of your marital property. If one person receives an inheritance, this would be considered personal property and not part of a settlement to be shared. However, if inheritances end up commingled with other property, they could potentially be considered part of the marital property.
Spousal Support
Spousal support, known as alimony, is not always awarded in Florida. Although, it can be appropriate in a high net-worth divorce, particularly when one spouse is significantly more than the other, and the spouse with the lower income passed on career advancement for the benefit of the high-earning spouse.
Various factors can impact whether or not spousal support would be awarded and how much it would amount to in a settlement. The Court initially determines whether the spouse requesting alimony has an actual “need” for alimony and whether the other spouse has the “ability to pay” alimony. If the spouse requesting alimony can establish their “need” for alimony and the other spouse’s “ability to pay,” then the Court may consider additional factors such as the duration of the marriage. Some of the factors include income available from all sources, earning capacity, educational skills, financial resources, age, physical and emotional condition, and responsibilities regarding raising children. The general guideline is that both parties should be able to maintain the same lifestyle they had during their marriage after the divorce.
If you have a prenuptial agreement, spousal support is typically included in the document and, therefore, generally speaking, predetermined. An attorney would thoroughly review the prenup when spousal support is being determined in a high net-worth divorce.
Business Ownership
Business ownership in divorce can cause complications. The division of assets involved will depend on when the business was established if both spouses were involved in operations or management, and the valuation of the business.
Additionally, the structure of the business can make a difference as well. A business where the spouse is the sole employee If a business existed before the marriage, it could be included in the prenuptial agreement and separated from the equitable property division.
When business owners are going through a high net worth divorce, keeping business and personal finances separate is important. It is equally important to keep business records up to date and accurate. It is recommended to have a financial advisor to help with this process.
Ensuring a Fair Settlement in a High Net Worth Divorce
A comprehensive approach ensures a fair settlement in a high net-worth divorce. Attorneys and financial advisors work diligently to achieve a fair settlement, leveraging strategic planning, accurate asset valuation, and negotiation.
The attorneys at Golden Key Law Group, PLLC are experienced in representing clients in high net-worth divorce cases and are knowledgeable about the complex financial issues that arise in such cases.
Call to schedule a consultation and protect your interests today.