Does your estate make your divorce a high net worth divorce?
What makes a high net worth divorce different?
This article is going to cover:
So, let’s dig in.
Custody can be devastating. It’s heartbreaking when parents lose custody of their children. Spouses end up having to pay agonizing amounts of financial support.
If you want to protect your rights, not wrongfully lose custody, and not get raked over the coals financially, fill out the form below.
A high net worth divorce is one where the estate is worth more than one million dollars.
This is one million dollars in liquid financial assets.
A high net worth divorce has higher stakes than a normal divorce.
This is because the estate is so large.
Let’s say that the estate is worth $10M.
And let’s also say that the spouses are negotiating for the estate.
Awarding just 1% of the $10M estate would be an extra $100,000.
Financially, the stakes are higher for a high net worth divorce.
Related: Grounds for Full Custody of Child
For a normal divorce, a divorce lawyer can handle everything.
For a high net worth divorce, there are several professionals that need to get involved.
This includes a(n):
The professionals on your team need to have a thorough understanding of:
To prepare for a high net worth divorce, we are covering:
A high net worth divorce includes assets such as:
Sometimes, it can be difficult to compile a list of your properties.
This is especially true if one spouse is hiding assets.
This is why a forensic accountant is normally hired for a high net worth divorce.
The cost of divorce is higher for a high net worth divorce.
This is due to the:
Let’s look at the costs of hiring the professionals for your high net worth divorce.
The average cost of divorce with children is $21,000.
That’s without all the extra costs of a high net worth divorce.
You can expect to be paying anywhere between $30,000 to $100,000.
It really depends on how complex your assets and businesses are.
The only difference here would be if you had an uncontested divorce.
The average cost of a normal uncontested divorce is ~$5,500.
Child support gets calculated based on:
Some states have a cap on the income that gets calculated.
For example, New York has an income cap of $154,000.
This means that if you are earning $250,000, then they are only calculating $154,000 of that.
They do not calculate your child support obligation on an income above $154,000.
The incomes that get taken into consideration are:
Most states consider at least some of these other factors in calculating child support:
Related: How Long Does A Divorce Take
Child custody for high net worth divorces is not special.
The types of child custody that you can get are:
If one parent gets awarded sole custody, the other parent will get a visitation schedule.
The courts will determine child custody based on the best interests of the child.
The best interests of the child include:
Judges like to give primary custody to the parent who is more likely to co-parent well.
They want to make sure that the child has a stable environment.
That means maintaining:
Related: Moving Out Of State With Child
Here are the most common professionals needed for a high-net-worth divorce.
You can use the professionals that you already have.
Or you can use the ones that your divorce lawyer recommends.
When assets are liquidated, you’re left with a pile of cash.
Most high net worth individuals want, or need, to reinvest that money.
Or maybe they want to set up a budget, insurance, and retirement planning.
A good financial planner will help you reduce spending, pay off debt, and save and invest.
Related: Divorce as a Stay at Home Mom
When you go through a high net worth divorce, your assets get split up.
And the entities that held them get dissolved.
Your estate planning attorney can set your estate plan back up.
They will understand how to structure entities to hold your assets.
They understand how to protect your assets.
And they know how to pass down your inheritance while minimizing taxes.
And making sure that no one from your previous marriage gets their hands on the inheritance.
There’s another important aspect here.
You also need to appoint a power of attorney.
This is someone who can make decisions if you become incapacitated.
Related: Disadvantages Of A Trust
High net worth divorces cost a lot of money.
But they also incur a TON of taxes.
This is because a lot of assets need to get liquidated to split between spouses.
When you sell an asset, you’re going to be paying taxes on it.
Your tax professional can help the team come up with a strategy to reduce your taxes.
This way, your walk away from your high net worth divorce with more money.
Related: Questions to Ask A Divorce Lawyer
A forensic accountant is not only for spouses hiding assets.
A forensic accountant will trace funds, identify assets, recover assets, and provide reports.
They will also provide presentations in court about their findings.
The courts will use them as an expert witness in your high net worth divorce.
But as long as neither spouse is hiding assets, this is a good thing.
It compiles and organizes your assets into a professional report.
Related: Is Alimony Tax Deductible?
These are the two biggest mistakes that we see people make in a high-net-worth divorce.
A high net worth divorce is complex.
Hiring a high-net-worth divorce lawyer is going to make things smoother.
They have teams of people with the experience to dissolve a large estate.
While a general divorce lawyer will fumble through your divorce process.
You need to hire a lawyer who can effectively handle your divorce case.
This will save you thousands in legal fees as they are more efficient.
And it’s going to save you tens, or hundreds, of thousands in assets.
This leaves fewer assets and cash for you and your family.
And it can drag out your divorce for years.
Related: Legal Reasons for Divorce
This is a common scenario for high net worth divorces with numerous assets.
Hiding assets is perjury and is a punishable crime.
Hiding assets can lead to large monetary fines or a perjury charge.
The courts will order you to report a list of ALL the assets you own.
If you hide these assets, you’ll be held in contempt of court.
And contempt of court can lead to fines and jail time.
But the judge can also award your spouse more assets if you get caught.
Related: Irreconcilable Differences
If you want the best high net worth divorce attorneys to represent you, fill out the form below.
We have the experience needed to ensure that your rights are protected.
This means that you don’t wrongfully lose custody of your children.
We also make sure that your divorce judgment is equitable and fair.
This means you don’t get raked over the coals financially.
After you fill out the form below, we will set up your free consultation.