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Divorces can be emotionally taxing and can create a financial burden on the ones involved. It is also more challenging to solve divorces involving high-net worth people due to the complexity of assets involved. This web page will cover the financial issues involved in high-net worth divorces, the common pitfalls mistakes you ought to avoid, and why you should hire a Long Island high net worth lawyer.
Division of Property in Complex High-Net Worth Divorces
Like in other divorce cases, high net worth divorces involve issues like alimony, child support, and child custody. However, these types of divorces are different when it comes to dividing marital property. The property and assets in these kinds of cases is complex, the tax considerations are substantial, and dividing property fairly is more difficult compared to other cases. Furthermore, cases involving family businesses tend to be very complicated. If both you and your spouse are running a family business, the business needs to be valuated, and the assets examined.
Many high net worth cases involve dividing assets such as:
Trusts and Stock Options
· Offshore and Multiple Bank Accounts
· Real Estate Investments
· Savings, Pensions and 401(k)s
· Enhanced Earnings
· Business Ventures
Common Mistakes in High-Net Worth Divorces
In many divorce cases, it is not unusual to hear that one of the spouses has transferred valuable assets to a third party like a child from another marriage, or a business partner. These transfers are deemed to be fraudulent and can cause you to lose your credibility in court. The other mistake would be not to investigate your spouse for hidden assets.
Failing to Give An Account Of Your Assets and Liabilities
When you are involved in a divorce, you need to fill a financial affidavit and show financial documents to prove your assets or liabilities. Failing to take this inventory will leave you with liabilities that are not yours or cause you to surrender alimony or assets you are not obligated to provide.
Failing to Determine The Tax Consequences
One of the biggest mistakes people make during high net worth divorces is ignoring the implications of taxes. When you get divorced and you get certain assets, you may be liable to pay taxes on distributions or to agree to alimony without bearing in mind how much you will remain with after paying taxes.
Desperate to Move On
Many spouses who are involved in divorces are desperate to get out of a marriage. This sort of desperation, whatever the reason, causes them to accept unreasonable terms. Agreeing to terms, like division of assets or liabilities and alimony, just to be away from someone can be costly in the long run.
Marital Versus Separate Property
High net worth cases present problems when it comes to ownership. In marriage, there is separate and marital property. Separate property is all the property that each spouse brought to the marriage while marital property is any property they acquired during their marriage. It is hard to distinguish between marital property and separate property especially with regards to property that has an increasing value. One way many spouses are able to avoid disputes involving marital and separate property is by getting into pre-nuptial or post-nuptial agreements.
Reasons You Need to Hire a High Net Worth Divorce Lawyer
Valuation of Wealth
The valuation of wealth requires expert analysis and opinions. Getting the best person to conduct a valuation can make the difference between winning and losing your case. It is crucial to hire a lawyer who can evaluate the experts and who will know how to choose the right person to carry out the valuation of your wealth.
If either spouse has complex financial concerns, it will be important to involve a seasoned lawyer to carry out forensic investigation. Your lawyer will help you determine whether there are hidden assets, and whether the value of assets and liabilities is accurate. Your lawyer will also help you realize the tax obligations that come with the possession of certain assets.
A divorce is an emotional time for the parties involved. It is during this time that you need someone to keep you in check and help you maintain a level head. Agreeing to the distribution of certain assets or liabilities can have serious consequences for you. The role of a lawyer is to ensure that you make informed decisions, and that any distribution or settlement you agree to is fair and reasonable.
Summing It Up
A high net worth divorce is a type of divorce case that involves individuals with assets and liabilities worth a fortune. Some of the pit falls you should avoid in these cases is hiding assets, failing to valuate your assets, acting emotionally, and failing to have a pre/post nuptial agreement. Hiring a lawyer to represent you in a high net worth divorce case can greatly improve your chances of a quick and fair settlement.