Special Considerations for High Net Worth Divorce
High-net-worth divorces typically require special consideration, compared to the average divorce. While there is no strict definition of a high-net-worth divorce, today’s high-net-worth divorce typically involves several million dollars in assets.
Factors affecting high net worth divorces
Successfully navigating a high-net-worth divorce requires careful planning and professional guidance. Here are some factors your attorneys will consider:
- Expert guidance: When one or both parties have ownership interests in businesses or hold high-value assets, such as antiques, expert appraisers and valuation professionals may be necessary to determine the accurate worth of these assets. Similarly, forensic accountants can investigate past financial dealings to ensure transparency.
- Tax considerations: Wealthy couples must be mindful of potential tax consequences during divorce. For example, you may be able to transfer assets between spouses tax-free in ways that may not be possible post-divorce.
- Child support: Child support is a significant concern in any divorce, but high-asset couples face unique challenges. While all states have child support guidelines, they typically apply to couples of more modest means. High-net-worth couples may have child-related expenses beyond the standard child support calculations. These could include private school or college tuition, which should be factored into negotiations or court orders. In addition, there needs to be a determination of payment of child support above the current combined statutory cap of $163,000.
- Inheritance and separate property: While property earned during the marriage is typically considered marital property and divided equally, inheritance is separate property. In most cases, money inherited during the marriage remains separate property and is not subject to division. However, complications can arise due to a legal concept called “transmutation.” Transmutation can occur when separate property becomes mixed with marital assets, making it more challenging to distinguish between the two. Thus, if it is transmuted, the separate asset becomes a marital asset.
- Prenuptial agreements: High-net-worth couples are more likely to have pre-marital agreements in place, which can significantly simplify the divorce process. However, disputes over pre-marital agreements can still arise, potentially leading to legal battles. Parties often challenge same in the early stages of the litigation.
For guidance during your high net worth divorce, contact the seasoned divorce lawyers at Jakubowski, Robertson, Maffei, Goldsmith & Tartaglia, LLP for a consultation.