Navigating a High Net-Worth Divorce

Ending a marriage is always challenging — emotionally and financially. However, high net-worth divorces can be even more complicated than other divorces. While the same laws and procedures apply, there are typically more assets to divide and various types of property that must be addressed. As with a traditional divorce, the objective is to ensure marital assets are divided fairly between the spouses.

What is a High Net-Worth Divorce?

Although there is no legal definition of what constitutes a high net-worth divorce, they usually refer to divorces in which a couple has a combined net income of at least one million. In addition to dividing liquid assets, there are often complicated property division matters when it comes to investments, retirement accounts, real estate, and business interests. Since a high net-worth divorce can include a substantial amount of assets, these cases can be particularly contentious. In addition, high net-worth couples often have assets that are split across numerous states or even different countries.

Considerations in a High Net-Worth Divorce

While the same issues must be resolved in a high net-worth divorce as a traditional divorce — such as alimony, child support, child custody, and property division — there are a number of unique issues that must be taken into consideration. More assets must be divided, and the process of doing so can be much more nuanced. Specifically, some special considerations in a high net-worth divorce can include the following:

• Tax ramifications — The tax implications can be significant in a high net-worth divorce. For example, transferring assets, dividing investment accounts, and alimony can all have long-lasting tax consequences. These tax ramifications are important to understand before deciding how certain assets will be divided.
• Business interests — In a high net-worth divorce, one or both spouses may own businesses. You may need to obtain a business valuation and decide the best course of action in dividing the business interest.
• Retirement accounts — Retirement accounts such as 401(k)s and IRAs in a high net-worth divorce are often substantial and can be contentious to divide. Some types of retirement plans also involve creating a Qualified Domestic Relations Order (QDRO).
• Child support and alimony — Since a substantial amount of income is involved, high-asset couples can face more complex situations when it comes to child support and alimony considerations.
• Real estate — High net-worth couples often own a considerable amount of real estate in one or more jurisdictions. For example, the primary residence, vacation homes, investment properties, and undeveloped land must all be divided if acquired during the marriage.
• Intellectual property — Intellectual property such as copyrights and patents may come into play in a high net-worth divorce. Any intellectual property created during the marriage could be considered marital property.

If a valid prenuptial or postnuptial agreement was entered into between the spouses, this document may decide the outcome of any property division matters that must be decided in divorce. These contracts can be particularly useful in a high net-worth divorce to protect separate property, determine what assets will be deemed marital property, safeguard business interests, and address spousal support. However, they cannot decide child custody matters in advance — this would be determined based on the best interests of the children at the time of divorce.

Experts in a High Net-Worth Divorce

In many high net-worth divorces, experts can play a crucial role in navigating the complexities of evaluating assets and property. For instance, appraisers and valuation experts may be needed to deal with complicated financial valuations. They can assess the value of businesses, real estate, art collections, investments, and other assets that fluctuate in value.

Forensic accountants may also be needed in high-asset cases, especially when a spouse suspects the other of concealing assets. These professionals are skilled in examining financial records to uncover assets that were not disclosed and help ensure all income is reported accurately. The types of high-value assets that they deal with can include pensions, offshore accounts, investment portfolios, trusts, business interests, and personal assets.

Mediating a High Net-Worth Divorce

Litigation isn’t the only way high net-worth divorce matters can be resolved. Alternative dispute resolution methods such as mediation and the collaborative process can keep your divorce private, low-conflict, and amicable — without the stress of litigation. These processes can also allow spouses to remain in control of the outcome of their divorce and find solutions that might not be available in the courtroom.

With mediation, couples work with a neutral third party called a mediator who will help facilitate healthy communication. Everything that takes place in mediation is confidential. Couples can find creative compromises regarding the issues that must be decided and reach a resolution that works for their family.

The collaborative process is also non-adversarial and takes place outside of the courtroom. However, it involves assembling a team of professionals who will assist the couple with reaching a resolution, based on their unique needs. The professionals that may assist in a high net-worth divorce can include specialized financial experts such as accountants, financial planners, and neutral financial professionals to help with resolving financial issues.

Contact an Experienced Utah High Net-Worth Divorce Attorney

If you are facing a high net-worth divorce, it’s essential to have an experienced divorce attorney on your side who can protect your rights. A skillful divorce attorney can provide you with the legal representation you need and help ensure your financial interests are safeguarded. Based in Salt Lake City, BartonWood provides capable counsel and trusted representation to clients for a wide variety of divorce and family law issues, including those involving complex asset division. To learn more about our legal services and how we can assist you, call 801-326-8300 or contact us to schedule a consultation.