How Are High Net Worth Divorces Unique?
Posted in Divorce on July 2, 2022
While a divorce can be difficult for any couple, the issue of property division can be particularly challenging for high net worth couples. In general, you are considered high net worth if you have over $1 million in assets. In this scenario, it is important to consider the unique aspects and elements of your divorce to better protect your legal rights.
A high net worth divorce requires greater attention to the issue of property division. There is more at stake for each party involved – a greater amount of money to potentially gain or lose. In addition, these cases often involve complex assets, such as retirement savings accounts, 401(k)s, pension plans, stocks and bonds, investments, real estate, jointly owned businesses, and assets held overseas.
High Probability of a Contested Divorce
With more money on the line, the probability of a contested divorce case increases. A contested divorce means that the couple does not agree on the terms of the dissolution of marriage, such as how to divide marital property. If a couple can agree (an uncontested divorce), the courts in California will generally sign off on their settlement agreement and property division plan. Otherwise, the case will have to proceed to court.
Separate vs. Community Property
In California, state law divides all community property down the middle in a divorce or legal separation case that goes to court. It cannot divide an individual’s separate property, however. Separate property refers to any gifts or inheritances given to one spouse during the marriage, as well as property that an individual owned prior to getting married. Making the distinction between which of your high-value assets are community property and which are separate is critical if you wish to protect what is yours.
Jointly Owned Business
Many high net worth divorce cases involve jointly owned businesses. This is a complex asset that can be difficult to divide in a divorce. There are a few options available to a couple that shares a business. First, they could sell the business and split the profits. Second, one spouse could keep the business in exchange for giving up a matching value in marital property. Third, the couple can keep the business and continue running it together after the divorce. It’s important to discuss the options and tax implications of dividing a jointly owned business with an attorney during a divorce case in California.
It is common for a high net worth couple to keep some capital and assets overseas in foreign accounts. This may require the hiring of a forensic accountant to search for assets and valuate them. Both spouses are legally required to report foreign accounts and include them in their financial disclosure forms at the beginning of a divorce case. If you suspect that your spouse is hiding offshore assets to protect them from being divided, contact an attorney. This is a serious offense that can have various penalties.
How to Handle a High Net Worth Divorce Case in California
These are just a few examples of the many confusing elements you will most likely encounter during a high net worth divorce case in California. You may also have to face complications such as tax implications, a prenuptial or postnuptial agreement, and alimony. The best way to deal with a high net worth divorce is to hire a divorce lawyer for assistance.
A lawyer can help you gather financial documents, disclose all of your assets, search for assets that your spouse might be hiding, and hire forensic accountants and financial experts. A lawyer can also represent you during negotiations with your spouse to improve the odds of reaching a settlement. If this doesn’t work, your lawyer can advocate for your rights in court. For more information about a high net worth divorce in Solana Beach, contact Ratzer|Dobis today.