High Net Worth & Complex Divorce

High-net-worth divorces often require the services of professionals like financial analysts, private investigators, forensic accountants and valuation experts, and certified public accountants. If one spouse is attempting to hide assets, an IRS investigation could become necessary. Other complexities associated with a high-net-worth divorce can include the following:  

• Deviation from “normal” child support amounts or spousal support amounts can be expected. While child support is generally calculated by taking the income of both parents, along with the specific needs of the children into consideration, when one or both parents have income far outside the “average,” the typical algorithm no longer works. A high net worth can be considered when determining spousal maintenance, since the court may consider what level of lifestyle the couple had during their marriage.
    
• Hidden assets are often a component of high-net-worth divorces. The spouse with the higher net worth may be hiding assets to prevent them from being split with the other spouse, and the spouse with a lower net worth may be concerned about whether assets are being hidden. When one partner has been the sole money manager, hiding assets is even more likely. Spouses who receive high salaries and benefits may ask their employer to delay promotions or bonuses until after the divorce to avoid having to split those assets. Spouses are legally required to list all their assets on their financial disclosure, and if a judge finds out a spouse is hiding assets more assets may be given to the other spouse—in other words, it’s simply not worth the fallout you could face for hiding assets. 
   
• Professional practices and businesses must be valued and divided. Professionals like doctors, lawyers, CPAs, and others are often a part of professional practices. The spouse may own a share of the practice, which, if developed during the marriage, becomes a marital asset. Unlike salaried positions, the trajectory of a professional practice or business can be difficult to predict. A business could potentially become wildly successful overnight, only to shut its doors months later. Issues like operating costs, projected growth, and debt must all be considered when valuing a professional practice or business, adding significant layers of complexity to the divorce and division of assets.
     
• Accurately valuing the long-term growth of marital investments can also be difficult because it can be hard to calculate whether those investments will grow, and, if so, to what extent. A financial adviser may be a necessary component when attempting to assess the potential growth of investments in order to equitably divide those investments.
    
• Dividing homes, land, and rental properties can go far beyond the typical marital home in a high-net-worth divorce. Not only must the current market value of each property be determined, but the potential for appreciation or depreciation, along with any expected tax burden tied to the property must also be assessed.
    
• Retirement assets like 401(k) accounts or pensions must be fairly divided, taking away any contributions that were made before the marriage, therefore, remain separate property. Since retirement assets take a significant “hit” when they are cashed in prior to retirement, it must be determined what the account will be worth at the time of distribution, then how much each spouse will be entitled to receive. Courts often order a Qualified Domestic Relations Order that recognizes joint marital ownership in the plan, then details an equitable split.
  
  

Perhaps the best way to protect your assets if you are a high-net-worth individual is with a prenuptial or post-nuptial agreement. This legal document will detail how assets will be divided in the event of a divorce. If you are considering a prenuptial or post-nuptial agreement, it is essential that you speak to a highly skilled Cullman family law attorney who can help you ensure your prenuptial or post-nuptial agreement is airtight and legal.