High-net-worth individuals (HNWI) are defined in the financial world as those who have at least $1 million in liquid assets. Any couple who has significant assets, including property, businesses, and luxury items, is likely to have a complicated divorce process. For this reason, it is very important to have a divorce attorney here in Bucks County who has significant experience with the division of high-asset estates helping you through this process.
A variety of problems can arise during high-asset divorces, which can be avoided if handled properly from the outset.
Avoiding court and publicity
In our experience as divorce lawyers, we have found that settlement is almost always more advantageous to both spouses than going to court. Going to court has numerous disadvantages: the process is long, requiring multiple court dates that need to be squeezed into an overly-full court schedule; the judge makes a final decision on separating your assets, taking the power out of your hands; and all judicial proceedings become public record so that your private affairs are open to public scrutiny.
While going to court is sometimes the best solution, and we are committed to fighting aggressively for our clients' advantages when we do go to court, we are also highly experienced in negotiation to help you avoid court if possible and get the settlement that you want.
Dividing complex assets
High-asset couples and HNWIs usually have significant yearly income and have amassed significant financial and physical assets, including multiple homes in different states, multiple retirement funds such as 401ks and Roth IRAs, living trusts, rental properties, and businesses.
Without expert guidance, assets may be inequitably divided or may not be valued properly. An experienced divorce attorney can help you get the experts you need to properly value your estate. Some of these experts include:
- CPA: to divide expenses and run calculations to determine the future net worth of financial assets and the income of each of the spouses
- Tax attorney: to help calculate tax effects and create a financial plan to limit tax impact during the division of assets
- Forensic accountant: to dive deeper into details of more complex finances, such as overseas transactions, complex movement of money between accounts, and hidden assets
- Business evaluator: to value a business or rental property, if there are any
- Appraiser: to assess the value of physical assets such as jewelry, art, and antiques
- Estate attorney: to help create a new will, healthcare proxy, power of attorney, and trusts for your children
- Counselor/therapist: to help with the strain of the divorce process, especially if children are involved
You may not need all of these experts; we will look closely at your situation and advise you on whom you need to ensure the best outcome. The cost of hiring these experts is often outweighed by the significant financial (or emotional) benefit that their service provides.
Keeping what's yours
Not everything is marital or shared property. In a complex, high-asset divorce, there are often assets that belonged to one spouse before marriage that have not been mingled with marital finances or used to benefit the family. If this can be demonstrated, these assets would not be divided.
During the marriage, HNWIs often accumulate property or items of value under their own names that they don't use for the family, and they may receive gifts from someone other than the spouse. Again, if these can be proven to be separate, they will not be classified as marital property. Proving they are non-marital property will take specific documentation, which a financial expert such as a CPA or forensic accountant may be able to help you procure.
Child support
In high-asset marriages, it may seem that the spouse who receives custody would not need child support. However, not all high-asset couples have two working spouses or two spouses who have similar incomes. And even when they do, children often attend expensive schools or extra-curricular activities, which it would be important to maintain in order to limit the impact on the children as much as possible.
Therefore, it's important to look honestly and fairly at the situation and arrange a plan to support the children that may include either child support or the development of living trusts that are funded by other financial assets, such as stock dividends. With high-asset couples, there are a variety of ways to make sure the children are supported that do not include child support.
At the Law Offices of Blitshtein & Weiss, P.C., we are experts in all areas of family law, as well as probate and bankruptcy, thus we have a broad knowledge of finances, tax law, and division of assets in high-asset estates. Contact us today in our Southampton office at (215) 364-4900 to help you avoid many of the pitfalls that can befall high-asset divorces.