When going through a divorce, many people are worried about what will happen to their assets. After all, if you are like most Americans, you have spent a large chunk of your life doing work to obtain the assets that you now have. As such, you want to keep as much of it as you feel you are entitled to.
What is a high net worth divorce?
Courts traditionally consider a high net worth divorce case to be one where spouses have more than $1 million in liquid assets. These could include bonds, stocks, cash and even traded commodities, depending on the financial situation of the parties.
If you are a high net worth individual and are considering a divorce, you must speak with trained lawyers as soon as possible to increase your likelihood of a favorable outcome. At the Law Offices of Thomas Stahl, we have tremendous experience in advising clients who have considerable portfolios.
How do high net worth divorces work?
The rules surrounding complex high net worth divorces vary from state to state. However, the process usually follows a similar pattern.
First, each party identifies all their assets. They then categorize them into the following categories:
Next, they value each of the assets in the marital and combination categories and then split them equitably between parties.
Because the financial arrangements of most high net worth divorces are so complex, it can take time to work out who is owed what. So before you embark on a divorce, prepare yourself for a relatively long process.
Some high net worth individuals will stop negotiations early in the hope of bringing about the conclusion of the divorce sooner. However, doing this can mean that you miss out on receiving assets to which you’re legally entitled. Again, therefore, it’s a good idea to work with an experienced attorney who understands these matters in detail and who can take your case forward.
Remember, bringing a high net worth marriage to an end is like dissolving a large company. There are many moving parts, with different assets worth different amounts.
The Costs of High Net Worth Divorce
Naturally, the costs of a complex high net worth divorce tend to be greater than those of a regular divorce. If you try to cut costs, then you ultimately create false economies. Many people who fail to use a high net worth divorce lawyer or forensic accountant find themselves worse off, not better off.
Please note that as you go through this process, you may create additional tax liabilities. Selling joint properties you both own that have appreciated since you purchased them could saddle you with additional capital gains taxes. Because of this, it is critical to implement the correct accounting strategies.
In conclusion, divorce is a challenging process. But with the right help, you can get through it and emerge out the other side with your assets intact.