The Complications of a High Net Worth Divorce
Divorce, in general, is a challenging event for families. Affluent people with a high net worth who find themselves facing a divorce can encounter special complications within the process for a variety of reasons. At The Troum Law Firm, we understand the intricacies involved in high net worth divorces and are experienced in managing all the aspects to make sure you leave your divorce with a favorable result. Additionally, we understand the sensitive nature of divorces and focus on providing excellent customer service and results with your confidentiality in mind.
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Why Are High Net Worth Divorces Different?
High net worth divorces may be more intensive compared to regular divorces because of the income and/or value of the assets belonging to one or more spouse before or during the marriage. Essentially, the stakes are much higher. While some people might think of salary alone as a determining factor of net worth, there are many other types of assets that factor into it. Some assets may include:
- Professional Practice
- Ownership of a Business
- Inheritance or Trust
- Real Estate Investments
- Properties: Homes, cars, boats, etc.
- Retirement Accounts
- Expensive Artwork
- Stocks, Bonds, and Investments
It is important to remember that some assets, such as artwork, have a set, one-time value once appraised and sold while other assets, such as a business or real estate investment, can provide an ongoing source of income. Additionally, there are some assets that may incur cost over time. Understanding the different types of assets and their values, both current and ongoing, is an important step in making sure you come out at the end of the divorce with the assets that will best fit your new lifestyle.
Important Steps to Take in a High Net Worth Divorce
While Florida has one of the highest divorce rates in the nation, most people do not enter into a marriage planning to divorce their significant other. Nonetheless, divorce is sometimes the best step for spouses who are unable to move forward happily and healthily in their marriage. If you are a business owner, doctor or other affluent individual facing the decision of divorce, there are some very important steps to keep in mind before moving forward with the process.
First, have or create a plan for the divorce ahead of time. It is never a good idea to jump into filing for divorce without a plan, and this step is even more crucial for high net worth individuals. As part of planning, always consider the following:
- Any children involved and the impact the divorce will have on their lives, including their potential living situation and custody
- How the divorce will impact your living situation, finances and assets
- What you want out of the divorce in terms of assets
- Whether you want to manage the divorce in the court system
Considering these higher level items before moving forward with a divorce can help you maintain a clear vision of what you want to accomplish throughout the process, which can sometimes take months or years. The latter point should also be strongly considered for affluent couples with children. Not all divorce cases have to go through divorce court, and in fact, many can be resolved amicably through mediation and out-of-court settlements, both of which allow for more privacy and resolution away from the public eye.
Next, hire an experienced attorney. With the complexities of a high net worth divorce, it is very easy for details to slip through the cracks if you were to try and handle the divorce yourself, which can be to your detriment and lead to an unfair division of assets. Working with a caring, experienced attorney from The Troum Law Firm can help ensure an efficient process ending in the best possible result for you.
Other important items to consider within the divorce process are:
- Accurate identification and appraisal of assets
- Accurate assessment of spousal spending
- Consideration of tax liability in relation to the division of assets
- Assessment of existing prenuptial or postnuptial agreements
- Child custody and child support
- Potential alimony payments
At The Troum Law Firm, our experienced attorneys work regularly with forensic accountants, divorce appraisal specialists and other professionals to correctly find, identify and assess assets in a high net worth divorce.
Child custody and child support are additional factors to consider for any type of divorce when children are involved. The Income Share Model is used as the basis of child support laws in the state of Florida and considers the net income of each parent and the number of children in the home. While this calculation might seem simple enough, for high net worth individuals, the value of assets outside of salary and wages can have a significant impact on the determination of child support payments.
Lastly, alimony, also known as spousal support, may also be a factor in high net worth divorces where one spouse makes significantly more money than the other. Florida divorce courts consider numerous factors in determining alimony, such as the duration of the marriage, standard of living during the marriage, each party’s age, financial needs, and health. There are also different types of alimony that can be awarded in a divorce:
- Bridge-the-gap alimony
- Rehabilitative alimony
- Durational alimony
- Permanent Alimony
At the Troum Law Firm, P.A., we understand that every divorce is different and that high net worth divorces come with unique challenges. Our skilled, attentive and responsive attorneys are ready to take on your case and help you navigate through the entire divorce process. Contact us today to schedule your confidential consultation.