What to Consider In High Net Worth and All Divorces
A divorce proceeding is never going to be an easy or enjoyable experience for anyone, but it can at least provide a resolution to a difficult situation and a new start for everyone involved. In any divorce, there are going to be many different factors that have to be carefully considered, such as child custody, visitation rights, parenting time, maintenance – i.e. alimony – and much more. Almost by definition, a divorcing couple often find little bit they agree on and are often unwilling to compromise – at least at first.
This can be particularly the case when it comes to dealing with a divorced couple that has a very high net worth, since specific and unusual circumstances are likely to be present that are less likely to occur with a less affluent couple. For example, for a divorcing couple that has significant assets, sizable debts, complicated business interests and various investments, the stakes in the divorce are far higher for both parties. This is why certain actions in steps that normally would not happen in a divorce are more likely to occur with wealthier couples.
Parties to a divorce generally feel an array of emotions – most of them negative –, including anger, disappointment and even betrayal. As a consequence, it can be very difficult for these individuals to make sound decisions regarding their future finances. At the same time, it is absolutely vital for them to take into account the impact that their divorce is going to have on their income and financial assets. In cases of high net worth couples, it is even more important that they not rush the process of negotiating financial matters just to get the divorce over and done with.
While both parties may desire quick end to the divorce proceeding, it is best if things are done in a thoughtful manner. Of course, many aspects of a high net worth divorce case will be similar to those of any other divorce. But when the resources are far greater, the disputes arising in a divorce and the consequences of those disputes can be far more significant for the spouses.
Occasionally, people may choose to represent themselves in a divorce case, relying on their relationship with their spouse and distancing themselves from lawyers. However, you should keep in mind the person divorcing you now has their own interest in mind, not yours. So even when a mediator is used it is important to have a separate legal advisor who can overlook any resulting agreement. Without reliable guidance, you could face massive losses in your divorce if you and your spouse have a high net worth.
In high net worth divorce cases, potential solutions can be found using collaborative law – since this process brings together professionals who can work on the issues involved. This group can include not only the parties in the divorce and their lawyers, but also financial, mental health and child specialists.
In cases in which litigation is required, the court may request a report from a forensic investigator. This means an expert in psychology will be chosen to investigate the parents and the children and deliver a report to the court so that it can determine just what is in the best interest of the child or children in question.
During litigation, the court can make use of a number of methods in order to better understand the situation that issue, including depositions, subpoenas, financial discovery settlement conferences and examinations before trial. In a mediated or collaborative divorce case, such information is expected to be disclosed voluntarily so as to ensure that the full picture of their finances is revealed.
Whichever approach is chosen for resolving the divorce case, it is essential that all of the assets are properly valued. Evaluating the correct value of all assets will make the process of equitably distributing those assets go much more smoothly. For those assets related to a company or business – including shares in that company – it is vital for experts to arrive at an accurate valuation so that each party involved gets the settlement to which they are entitled.
In addition, there can also be complex tax concerns connected to the assets belonging to each party. These concerns can include anything from future income taxes to capital gains. While experts are sometimes necessary ordinary divorce cases, for a divorce involving high net worth individual’s financial experts are absolutely crucial.
Then there are the issues revolving around maintenance and support for both spouses and any children in the family. While maintenance laws passed in New York State in 2015 put an income cap of $175,000 in place for the average divorce case, courts can mandate additional maintenance payments for high net worth individuals. In the same way, high net worth individuals face a much higher likelihood of the court requiring them to provide much higher levels of child support.
It is essential to get sound advice and guidance when you and your spouse are considering a divorce – and this is even more important when you have a high net worth. You should also consider the use of a confidentiality agreement, while also avoiding social media entirely – or at least avoiding any discussion of personal matters. Something you type into Facebook today regarding your spouse or the divorce could appear in court against you next week. It is also true that you can expect your high net worth divorce to take longer than the average divorce.
If you need advice and assistance with your divorce, the lawyers at the Spodek Law Firm stand ready to help you deal with this difficult time in your life. Whether you have a high net worth divorce proceeding in the offing, or simply have questions about divorce and family law in general, please contact us at once. Our experienced staff is eager to help you.