It becomes even more complicated in high-net-worth divorces where there are significant assets involved because of their size and nature.
High-net divorces usually involve large jurisdiction disputes, company valuations, dividing liquid assets like land, and international investments and trusts. Therefore, whether you or a loved one is going through a high-value divorce, there are legal considerations that can help make the process easier and avoid getting into legal trouble.
Needed Experts
The first thing you should think about is the team of professionals you need by your side. In addition to being an attorney experienced in high-net worth divorces, you will likely need additional expertise in unravelling the complexities involved in asset assessment and financial valuation.
Appraisers are among the first professionals you should contact if you have substantial assets like real estate and collectables that need valuation. They offer accurate assessments of the assets’ worth to ensure a fair division.
Valuation experts are also essential in the case of complex assets like a business, intellectual property, and investments. They determine their monetary value and help negotiate equitable settlements.
You should also have forensic accountants if you are concerned about hidden or undisclosed assets. They scrutinize and track transactions and financial records to ensure all assets from you and your spouse are included in the divorce proceedings.
Asset Division
Assets are among the primary sources of difficulties in high-net-worth divorce proceedings. The first thing you should do is have experts value your marital estate, which can include business interests, real estate, investments, and other assets like vehicles. There are a lot of complications in dividing the assets, with some people wanting a 50/50 division and others wanting a division based on each spouse's contribution.
That is why many people consider getting prenups and postnups. Prenups are legal documents made before marriage to outline how spouses will divide assets and liabilities in case of a divorce. They help simplify the process and reduce divorce costs.
On the other hand, postnups are made during the marriage with the same purpose as prenups. They are essential when couples need to clarify or revise their financial agreements, especially after career changes or inheritance.
Business Division
Dividing a private business is among the most challenging things to do in high-net-worth divorces, especially if the business is still active with both spouses actively involved. It becomes even more complicated if the company is the only or among the primary income sources for the family.
The first thing you must do is hire an experienced business evaluator who will consider factors like cash flow, assets, market conditions, and liabilities. That way, the business is split fairly, with each spouse getting an appropriate part of the business's shares.
Some couples might choose to sell the business and split the proceeds, or one spouse might buy the other's shares. However, that depends on the couple's preferences and the size of the business.
Tax Implications
High-net-worth divorces could have major tax implications, so you should have a strategy to minimize tax liabilities and protect your financial interests. Tax liabilities mostly depend on the assets being divided and how they are split.
Child Custody and Support
Courts usually consider the children’s best interest in any proceedings. Therefore, they consider things child-related expenses, like private school fees and expensive activities or vacations, which might become challenging to adjust to after divorce.
They also consider parenting roles and work requirements, especially because many high-net-worth households have two working parents or one breadwinner and a stay-at-home parent.
Spousal Support
The court will determine whether a spouse receives support, also known as alimony. They also decide the amount and how long the support should last.
That can differ based on things like the marriage duration, marital standard of living, assets and liabilities between the spouses, alimony tax ramifications, earning ability between both spouses, plus the spouses' emotional and physical conditions.
Conclusion
Divorce is never an easy process because of its complexity and the emotional burden it brings. However, understanding legal considerations like alimony, asset division, child custody, tax implications, and business division could make the process more manageable.
However, you need to hire a team of experts to take you through all the considerations.
