High Assets in a Divorce
If you are planning and file for divorce and are anticipating a high net worth divorce, what do you need to know about protecting assets and ensuring that you retain a significant share of your family’s wealth?
Nobody gets married with the expectation that the relationship will end in divorce. However, according to the American Psychological Association (APA), as many as 40 to 50 percent of marriages in the U.S. end in divorce, and divorce rates for second marriages are even higher. In other words, approximately half of everyone who gets married ultimately will end up getting divorced. And about 90 percent of Americans do get married by the age of 50. Each state has its own laws concerning divorce, and it is important for anyone who is getting divorced to understand how the law will impact financial issues of property division and alimony.
For high net worth individuals, the stakes are often much higher. Indeed, dividing assets in a divorce, or divorce splitting assets, is often very complex for high-earning couples. As a result, the division of marital property can become quite contentious. An experienced high net worth divorce lawyer can help you to negotiate a settlement and to advocate for your right to assets acquired during the marriage.
How to Protect Assets in a Divorce
If you want to know how to protect assets in a divorce, the first step is entering into a premarital agreement or, if you are already married, a postnuptial agreement. Indeed, for a high net worth individual who is the primary breadwinner in the family, the best way to safeguard your money is to enter into a premarital or a postnuptial agreement. Many states in the U.S. have adopted what is known as the Uniform Premarital Agreement Act (UPAA), which outlines what a premarital agreement can and cannot include. It also makes clear how and when a premarital agreement becomes unenforceable. Some version of the UPAA has been adopted in all states except Mississippi, Missouri, South Carolina, and West Virginia. Those states have their own specific laws regarding premarital agreements.
If you already made a significant amount of money before the marriage, a premarital agreement can protect that money and can also protect your wealth earned during the marriage. For example, your premarital agreement can specify that certain assets obtained during the marriage will be “separate” or “nonmarital” property, and thus not subject to distribution in a divorce. Premarital agreements also allow couples to agree to the terms of alimony in the event of divorce, or to eliminate it altogether if both parties agree.
Generally speaking, premarital agreements allow couples to enter into a contract concerning almost any financial issue outside of child support, and the agreement generally will be enforceable unless one of the parties was coerced or under duress when she or he agreed to the terms, or if one of the parties made a material misrepresentation about his or her financial situation in getting the other party to sign. If you do not have a premarital agreement, a number of states allow parties to enter into a postnuptial agreement during the marriage. A divorce lawyer can provide you with more information about the specific laws in the state where you reside and where you plan to file for divorce.
Dividing Assets in a High Net Worth Divorce
The division of marital property can be extremely anxiety-inducing for wealthy individuals in a high net worth divorce. When determining how the court will divide your marital property, it is important to know whether you live in a community property state or a state that distributes marital property according to a theory of equitable distribution.
Community property states include Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington. If you live in a community property state and do not have a premarital or postnuptial agreement, the court typically divides marital property (which includes both assets and debts) in half between the parties. For high net worth couples, this can mean that the primary breadwinner ends up with significantly less money than she or he earned during the marriage since half of it will go to the other spouse.
States that operate on a theory of equitable distribution divide marital property in a manner that is fair or equitable to both of the parties, but is not necessarily equal. The court takes into account numerous factors when determining what is equitable to the parties. A divorce attorney can discuss options for negotiating a property settlement in order to help you protect your wealth and earnings.
Complex Property Distribution Issues in a High Asset Divorce
Couples in high net worth divorces often have extremely complicated cases when it comes to property distribution. While some couples only have to worry about dividing money in a shared bank account and making a decision about how to divide the equity in a home, high net worth individuals often have numerous assets that are subject to division. For example, an article in Fidelity cites some of the following as assets that must be divided in a high net worth divorce:
● Family home;
● Vacation home or timeshare;
● Real estate being used for rental income;
● Traditional retirement accounts and pensions;
● Health savings account (HSA);
● Investment accounts;
● Health insurance benefits;
● Life insurance;
● Motor vehicles;
● Art and other valuable collections; and
● Antique furniture; and
● Family heirlooms.
Contact an Experienced Divorce Attorney About Splitting Assets in a High Net Worth Divorce
Dividing property in any divorce is complicated, and the process becomes increasingly complex for high net worth couples. Not only are many assets more difficult to value, but there tend to be many more assets that are classified as “marital property” and thus are subject to division.
If you want to learn more about splitting assets in a high net worth divorce, an experienced high asset family law attorney can assist you. We service clients nationwide, and our attorneys have decades of experience working within state law to ensure that our clients feel supported throughout the divorce process. Contact 1-800-FAMILY-LAW to discuss your case with an aggressive advocate today. You deserve to have legal counsel on your side.