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Divorce is a major life transition, filled with legal difficulty and deep emotional distress. Additional challenges arise when the spouses are financially well off. These cases can be more complicated than traditional divorce for a variety of factors.
Preparing for this process requires special attention to detail, and it helps to understand how this scenario is different from a “traditional” divorce. This article explores the key differences between high asset divorces and standard divorce proceedings, helping you make more informed decisions in your marriage dissolution.
What Makes Divorce a “High Asset?”
A divorce is “high asset” when the individuals involved possess substantial financial assets. These assets generally include stocks, real estate, business investments, and personal property.
The is no standard, “one size fits” all definition of a high net worth divorce. Typically, we consider a divorce “high asset” when the property is valued at $1,000,000 or more. Again, this is not a hard-and-fast rule. Some divorces with lesser assets can be just as complicated, and some with much higher value can be simple.
High asset divorces often involve complex negotiations regarding property division, alimony, and child support. Untangling these decisions may require help from financial experts and attorneys experienced in high asset divorce cases.
Comparing and Contrasting Traditional and High Asset Divorces
In traditional divorces, the value of the assets can be relatively low, and disputes over property, custody arrangements, or alimony are more easily resolved. Simple negotiations can usually do the job for these couples.
High asset divorces, however, involve a wider range of financial considerations, such as real estate, investments, stock options, and art collections. These divorces typically require specialized legal and financial advice. Often, spouses must hire forensic accountants and appraisers. It can take much longer to finalize these divorces.
Overall, it may be more difficult for a high asset divorce to reach a fair conclusion. Even when one spouse receives a good deal of financial compensation, that money could be a fraction of what the other is worth. You could keep the receiving spouse within their accustomed lifestyle, and they still may not receive an equal or equitable cut of the overall marital assets.
Potential Difficulties in High Asset Divorce Cases
Transferring high-value property comes with a unique set of complications. For instance, who gets the house or the vacation property hinges on multiple factors, including prenuptial agreements, debt obligations, and the property’s value.
Similarly, spousal support can be difficult to determine. With high net worth families, there are no clear guidelines for how much or how long an ex-partner should receive support.
The property itself is more complex. Assets may have international origins, or they may be intangible items like intellectual properties.
Strategies for Successfully Handling a High Net Worth Divorce
Strategic planning is key to navigating a high asset divorce. You must hire a competent lawyer who understands the nuances of property law. They can help you negotiate a fair settlement.
You should also bring in financial experts who can provide additional guidance. They can help you understand the tax implications of dividing assets. Taxes alone can make keeping some property more costly, creating an imbalance in the property division.
Divorce is emotional, but it's important to remain level-headed during negotiations. Make your decisions based on rational, sound financial considerations. Act early, gather as much information as possible, and follow the advice of your team. By following these strategies, you can help ensure your high asset divorce goes as smoothly as possible.
Ford & Friedman has helped many families with considerable assets navigate fair, reasonable terms for their divorce. You can set up time with our team today, and we may be able to work for you, too. Our number is (702) 904-9898, and you can also reach us online.