Traditionally, a high-net-worth divorce was roughly defined as any divorce involving more than one million dollars in net liquid assets. Are the rich more likely to get divorced than those with fewer assets? A Newsweek article quoted Forbes which looked at the divorce rate among the wealthiest people in the United States. Roughly one out of every two billionaire marriages end in divorce. While this doesn’t seem that far off from the “average” divorce rate in the United States, that alters when you look at billionaires as a “segment.” The super-rich are statistically less likely to divorce than couples with no assets. (Couples with no assets are 70 percent more likely to divorce than those with at least $10,000 in assets).
Today, there are more cases of complex, high-net-worth divorces than in the past, requiring a strong Cullman high-asset divorce attorney to ensure the accuracy of the asset division. As an equitable division state, rather than a community property state, there are typically four steps involved in the division of assets. These steps include the identification of all assets, categorization of assets as marital, separate, or a combination, valuation of the marital assets, then distribution of marital assets in an equitable manner.
High-net-worth divorces usually bring unique challenges with each spouse in the divorce having more at risk than those in a middle-income divorce. Attorney Shelbie Hankey has the necessary experience and knowledge required to handle a high-net-worth or complex divorce. Shelbie has a thorough understanding of how to approach a complex, high-net-worth divorce as well as the skills necessary to ensure your rights and future are properly protected.
What Makes a Divorce a High-Asset or Complex Divorce?
Generally speaking, when the combined assets of a couple total one million dollars or more, it can be considered a high-net-worth divorce. In addition to the significant assets that must be divided fairly, complex divorces can also include:
- Professional practices
- Family businesses
- Businesses in general
- Professional partnerships
- Highly valued collections
- Complex employee contracts and/or benefit plans
- Financial holdings that require detailed forensic reviews
- Valuation of intangible or intellectual properties
- Significant tax implications of the asset division
- Assets and investments in other countries or states
- Combative behavior between the spouses.
Divorces become much more complex with every element added for consideration beyond the joint ownership of the marital home, issues related to children of the marriage, and “normal” property distributions. The following is a partial list of these added “layers” of complexity:
- Second homes
- Homes or land in other states or countries
- Vacation homes
- Property rentals
- Stock options
- Executive compensations, benefits, and bonuses
- Multiple businesses owned by one spouse, or when each spouse has multiple businesses
- 401(k) accounts and other retirement accounts
- Large life insurance policies
- Art or jewelry collections
- Multiple high-end vehicles
What Are the Unique Challenges of a High-Net-Worth Divorce Versus a “Typical” 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.
How Long Will a High Net Worth Divorce Take?
While an uncontested divorce between a couple without children and with few marital assets can potentially be completed in a manner of months, a high-net-worth divorce will almost certainly take much longer. The factors that influence how long a divorce will take include:
- Asset division in a high-net-worth divorce can be extremely time-consuming and complex. When experts are required to equitably divide assets, the process becomes much more complicated, it takes longer, and it is more expensive. When businesses or professional practices are thrown into the mix, the division of assets is likely to take even longer.
- The level of cooperation or lack of cooperation between the spouses will significantly influence how long a high-net-worth divorce takes.
- If there is a prenuptial or post-nuptial agreement in place, the division of assets in a high-net-worth divorce will go much more quickly. Without such an agreement, the division of assets can drag on for months, even years.
- When children are involved, most divorces become more contentious, thus more time-consuming. Child custody and child support are complex issues; custody battles can add months or years to the time the divorce takes. If one parent wants to move out of state with the children, more time can be added to the length of the divorce proceedings.
Why Does a High-Net-Worth Client Need a Cullman High-Asset Divorce Attorney?
Having a strong Cullman complex divorce lawyer from Hankey Law Firm by your side during a high-net-worth divorce can make a significant difference in how smoothly the divorce goes and how long it takes. Working with a Cullman high-asset divorce attorney who is well-versed in the intricacies associated with high-net-worth divorces means the divorce will be handled professionally and knowledgeably.
Your attorney will be cognizant of the paperwork that must be filed, taking care of your divorce in an efficient manner. Your divorce attorney can help prevent emotions from either spouse from getting in the way of an equitable settlement, providing a sensible third-party voice to ensure the best decisions are made on your behalf. If you want to ensure you are treated fairly and do not give in to unreasonable demands, attorney Shelbie Hankey is the right choice for your high-net-worth divorce.
How a Cullman High-Net-Worth Divorce Attorney from Hankey Law Firm Can Help
Although any divorce can be contentious or complex, a high-net-worth divorce is much more likely to have inherent problems that can take time and patience to work through. Having a Cullman high-asset divorce attorney from Hankey Law Firm ensures your divorce will be handled professionally by a lawyer who has the necessary experience and skills to guide you through the process in the best way possible. You can trust attorney Shelbie Hankey and her legal team to protect your financial future, as well as your relationship with your children, vigorously defending your rights at the negotiating table. Don’t wait—contact the Hankey Law Firm today.