If you are getting divorced, there are some things that you’ll need to be prepared for. If you’re going through a high net worth divorce, then you’ll probably experience a range of different issues. Here’s what you need to know if you are a high-worth couple going through a Texas divorce.
Texas Divorce: 8 Biggest Issues of a High Net Worth Divorce
Divorce can be a great challenge no matter how much money is involved in it. Separating from a spouse means a drastic lifestyle change, and adjusting to the changes can take time and a big toll on your mental health, even if the divorce was for the best.
But a high net worth can make divorce even more complicated. High net-worth couples are likely to face issues that other couples would not. If you are getting divorced, it’s important to know what potential issues might come up so you can be prepared.
1. Prenups
Prenups, or pre-nuptials, are documents that are prepared during the engagement of a couple. These documents outline what each partner’s current assets are and how they will be divided if the marriage ends. Not every couple will sign a prenup. Usually, they are signed when one or both partners have a significant amount of money.
But not all prenups are actually legal, and there may be some cases when the prenup might be ignored. For instance, if one partner was forced to sign the prenup, or if one partner did not disclose all assets, then the prenup may be set aside.
2. Property Divisions
Any divorce will require a division of property between the two spouses. When your property and assets are divided, they will fall into one of two categories. The assets and property will be divided accordingly.
Marital Property
This type of property refers to any property that was obtained by either spouse during their marriage. This includes vested and nonvested pensions, deferred compensation rights, and retirement.
Separate Property
This type of property refers to any property that’s been obtained before the marriage. It also refers to property that was given as a gift or by devise or descent during the course of the marriage. However, in mind that gifts from one spouse to another are only considered separate property if this is expressly conveyed when it’s given.
This might seem relatively straightforward, but you might run into some surprising issues with separate property. The line between separate and marital can be blurry at times, which makes dividing property difficult. For example, you might have used some of the money from an inheritance to fix up part of the house. In cases like these, an expert will most likely need to review the financials and assets to ensure that everything is divided fairly.
3. Child Support
Any divorce is challenging, but it can be even more challenging if there are kids involved. One thing that is going to need to be taken into account during a divorce is child support. But high net-worth couples may face different issues than lower net-worth couples.
Child support is usually calculated based on a formula that varies from state to state. But this same formula might not apply for high net-worth couples going through a divorce. If you have a high net worth, then the court may need to take different factors into consideration when deciding how much child support will be.
4. Business Issues
In many cases, a high net-worth couple might be involved in a business. This could be a family or just one that’s closely held. If there is a business involved in the divorce, then certain steps will need to be taken to assure proper division of assets.
During the divorce, a local business evaluator will come in to do an evaluation. You may also need a forensic accountant to help as well. It’s also important to work on the discovery of all assets, as many small businesses compensate their employees through other means than just wages. You may have received vehicles or other valuable items through this business that need to be taken into account during the divorce.
5. Spousal Support
Spousal support or alimony is money that one spouse is ordered to pay the other if one spouse makes significantly more than the other. Not all dissolutions of marriage require that alimony be paid, but there are certainly some that do.
For example, if you are dependent on your spouse financially, then when you are divorced your former spouse might be required to pay you alimony. This type of support is very important if one spouse makes a lot more than the other. Some factors will go into deciding whether one spouse should pay spousal support:
• The standard of living the parties are accustomed to
• The financial needs of both parties
• The current employment and income of both parties
• Debts, both separate and marital
• Whether marital misconduct was involved in the divorce
6. Property and Investments
Another thing that will need to be taken into account during any divorce is any property or investments that one or both spouses own. High net-worth couples often have additional properties aside from their primary residence. This might include a lake or beach house, cabin, or retreat. All properties involved in the marriage and subsequent divorce need to be analyzed. That includes any investments in personal property as well.
You might wish it were as simple as just giving one spouse one property and leaving the other for the second spouse. But often this is impractical. And when it comes to things like yachts, jewelry, classic cars, and fine art, this will also need to be inspected by expert appraisers.
7. Publicity
In many cases, couples with a high net worth are likely to have a certain amount of notoriety. People like celebrities, philanthropists, social elites, or prominent members of a community are likely to have a lot of attention paid to them in general. An unfortunate side effect of this is that getting divorced often means the public eye will be watching.
While not all high net-worth couples will struggle with this issue during their divorce, it can be extremely stressful for those that do. Speaking to your lawyer can help you find a solution to this issue and allow you to keep your divorce more private.
8. Length of Proceedings
When high net-worth couples get divorced, there are a lot of complexities involved. Assets need to be analyzed, experts need to come in and take a look at prenups, and a number of other things that need to happen.
With so many things that need to get done, it should come as no surprise that divorced with high net-worth couples can take a considerable amount of time to smooth out. Some cases can last for many months, and many times divorces between high net-worth couples can last for years.
Getting divorced is difficult, but it’s often the right thing to do. While all couples going through a divorce will run into issues, high net-worth couples are likely to experience different issues. Being prepared can help make the process as smooth as possible, as will getting the help of an expert lawyer. Get in touch with us at Skillern Firm to learn more.