If you and your spouse are pursuing a divorce and have a collected net worth of more than $1,000,000, your divorce may be considered a “high net worth divorce.” While the end goal of both standard and high net worth divorces is the dissolution of the marriage and the division of the marital assets, the significant amount of wealth involved in high net worth situations complicates the process.

In a high net worth divorce, the couple’s finances are likely more diverse, involving multiple homes or other real estate, investments and investment accounts, or even shared ownership of a business. In addition, the stakes in a high net worth divorce are higher, leading to heightened emotions and the risk of one or both parties resorting to questionable actions to secure a greater portion of the couple’s wealth.

In this article, we will explore potential issues that can arise during a high net worth divorce and how securing passionate and experienced legal counsel is vital in ensuring the case is settled quickly and with the best possible outcome.

Litigation May Not Be the Right First Step for a High Net Worth Divorce

Depending on the nature of the divorce, one or both parties may feel like heading immediately into the courtroom is the only way to settle the complex issues surrounding the divorce. This tendency may be stronger if the divorce is acrimonious and the parties don’t want to endure face-to-face negotiations with a mediator.

Mediation, however, should always be considered as a first option. For one thing, cases argued in court are a matter of public record. Every detail of a couple’s marriage, financial history, and other private details pertaining to the divorce will be made public during litigation.

Mediation is also considerably faster and less expensive than litigation and is more likely to result in a solution that benefits both parties and their family. If children are involved, mediation provides a solution that imposes the least disruption on their lives and allows the couple to find an agreeable custody and support settlement.

Finally, mediation allows both parties to retain some control over the proceedings. Once a divorce enters litigation, the outcome rests solely in the hands of the judge, and the likelihood of both parties being disappointed in the results is much greater.

There May Be Estate and Tax Considerations Involved in High Net Worth Divorces

In cases of high net worth divorce, there is often the additional complication of generational wealth. One spouse may benefit from a trust or expect a significant inheritance from a parent or other relation. Does this anticipated income get figured into the couple’s assets for division?

Tax issues can also become problematic, as the sale of marital property or liquidated investments may have significant tax implications for one or both parties.

An experienced attorney can help you identify and resolve these issues before they become a significant battlefront in the divorce proceedings.

Child and Spousal Support Are More Complicated in a High Net Worth Divorce

Every state in the US has a set of guidelines for determining how child support will be awarded in a divorce. Those guidelines, however, are not always applicable in high net worth divorces. Some states use an alternate support schedule for couples with a net worth above a certain threshold, while others have no definite guidelines for high net worth couples.

While child support payments are usually intended to ensure that the child is fed, sheltered, and clothed, children of high net worth couples typically have additional expenses that the court may not consider: private school tuition, extracurricular activities, and other expenses. Support for these expenses usually has to be negotiated separately.

Spousal support, also known as alimony, is even more complicated. Few states have any guidelines for calculating spousal support at all, much less in high net worth situations. That leaves a vast space open for disagreements as two people try to maintain the lifestyles to which they have become accustomed. Several high net value divorces have seen one or both parties illegally attempting to hide assets to avoid paying them out as part of a spousal support agreement.

An Amicable High Net Worth Divorce Is Possible

Most high-visibility, high net worth divorces in the public eye are messy, litigious affairs with accusations flying and acrimony from both sides. That is not the norm, however, and the main reasons that cases like these make it into the spotlight are because the strong emotions and dramatic confrontations involved make for engaging news stories.

Many high net value divorces never enter the public spotlight because the case is handled quietly through effective mediation, the divorce settlement is more-or-less agreeable to both spouses, and there are no explosive showdowns in a courtroom to prompt headlines in the press.

If both parties agree to put the needs of their children first, are open and fully transparent about their financial status, and agree to at least attempt to negotiate a settlement instead of moving directly into open confrontation, the likelihood of a good outcome is improved immensely.

High Net Value Divorces Are Complicated – We Can Help: Call EMC Family Law Today!

If you are involved in a high net worth divorce, choose a legal team that understands these complex cases and let them guide you through your next steps: 770-225-7000

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