Every divorcing couple has a number of difficult and emotionally trying issues to discuss and sort out, but the stakes are even higher in high net worth divorces. Each partner stands to lose quite a bit if divorce proceedings don’t go well, which often increases animosity and pushes each side toward litigation. Those embroiled in a high net worth divorce should prepare for the following issues.
In many divorces, one partner may try to hide assets or transfer assets to another person or company. While this is always a bad idea—one that can seriously hinder your side of a divorce case—it is especially dangerous for those with substantial assets, as the tax consequences can be significant. Additionally, one or both parties may need to tap into assets to cover living expenses while going through the divorce process. This may also come with a large tax bill.
Complex Asset Division Needs
High net worth families often have a complex variety of assets to protect their funds and allow for future growth. When you consider real estate, business ownership, retirement funds, and other investments, it’s clear how difficult it can be to divide assets fairly.
In addition to the difficulties that come with the division of assets, it can also be challenging to properly evaluate the worth of each asset. Individuals may get conflicting opinions or appraisals, dragging out the negotiation process.
Child support calculation is not the same for high net worth individuals. Standard calculations only apply up to a certain amount, at which point the court has discretion in deciding how much child support to award. Since the core needs of the child are essentially guaranteed in a high net worth situation, consideration is given to other factors.
Couples in which one person earns a large income or has substantial assets are more likely to have prenuptial agreements. While these are designed to simplify the divorce process, there is still often a significant legal battle over the terms of the prenuptial agreement. The legality of the prenuptial agreement may come into question.
High net worth families are often subject to public scrutiny, which can make an already challenging time even more painful. Details about the divorce may become public and there may be substantial public discourse about the marriage and its breakdown. Couples in this situation may choose to undergo mediation to minimize the amount of information that becomes public.
When divorce is imminent, it’s important to act quickly to protect yourself and start laying the groundwork for the next stage of your life. By “Finding Peace Through Strength,” McConnell Family Law Group strives to help individuals navigate the process in a respectful way. Look into your legal options now and call us at 860-200-3624.