Issues Surrounding High Net Worth Divorce
Life is rarely simple, and divorce is no different.
All couples have issues to consider when parting ways, including: custody and parenting time, child support, alimony, division of assets and debts, and more. The more issues involved in the divorce, the more opportunities for conflict.
High-net-worth couples face a unique set of financial challenges when it comes to dividing the many assets, properties, and other business holdings that make up the family’s balance sheet.
Below are some practical considerations for a divorcing couple with liquid assets exceeding $1 million.
New Jersey Child Support Guidelines May Not Apply
In New Jersey, child support payments are determined by the NJ Child Support Guidelines for families with a combined net (after tax) income of between $8,840/year ($170/week) and $187,200/year ($3600/week).
When incomes fall outside of this range, the guidelines no longer apply. This scenario requires a creative solution, because there is no governing structure to guide the process. Families are expected to figure it out on their own or let a judge decide.
A child support arrangement should be a family decision made through mediation or negotiation, if possible. These approaches allow parents to maintain control over the decision-making process, rather than risking it all on the opinion of a judge.
You can learn more about determining child support payments outside the NJ Child Support Guidelines here.
Your Partner May Be Hiding Assets
In some cases, one or both spouses may attempt to hide assets and underreport income to minimize alimony and/or child support obligations. This is an illegal activity with significant consequences, including harsh financial penalties and possible jail time.
A family law attorney familiar with high-net-worth divorces can help you produce evidence of purposefully hidden assets using a network of forensic accountants, business experts, private investigators, and financial planners.
For more information, read our list of 15 Ways Your Spouse May Be Hiding Assets.
When dividing assets and negotiating support arrangements, consider how these streams of income will be taxed on the paying and receiving ends.
Federal tax reform passed in 2017 significantly changed the way alimony will be taxed in 2019 and beyond. A divorce lawyer can help you consider all the facts before agreeing to a final settlement.
According to a Harvard Law School study, a divorce can impact a CEO’s productivity, attitude toward risk, and overall energy levels surrounding the business.
If the CEO is forced to sell (or surrender) parts of the business to satisfy the terms of a divorce settlement, he/she may no longer have the control or influence necessary to manage the strategic direction of the company.
When negotiating a settlement, make sure it doesn’t come at the expense of your livelihood.
High-profile and contentious divorce cases often gain the attention of the press. This kind of publicity is bad for business, and bad for families.
Try to keep your case out of the courtroom, if possible. A collaborative divorce, mediation, or arbitration approach can help you reach a final settlement outside of the public eye.
Hire a New Jersey Divorce Lawyer
In a high-net-worth divorce, the stakes are high, and the details are complicated. The divorce attorneys at Arons & Solomon can help you gather the facts of your case and protect your personal wealth.
Our services include:
- Demanding full financial disclosure from opposing parties
- Disputes over individual vs. marital property
- Working with financial experts to analyze financial records and identify assets, including: retirement accounts, investments, real estate, business ownership interests and other high-value property subject to equitable distribution
- Scheduling appraisals for high-value possessions
- Collaborating with forensic accountants and private investigators to expose the truth regarding hidden assets, employability, and business valuations
- Generating creative options for settlement
- Referrals to Certified Financial Planners® (CFP) to achieve long-term financial security
Contact us today for a free initial consultation.Request a Free Consultation »