A high net worth divorce is a divorce in which the property owned by the couple has a high monetary value. While high-asset divorces follow the same legal principles and proceedings as non-high net worth divorces, the process is much more complicated and requires a more sophisticated approach.
Two issues that must be addressed in all divorce cases – but especially in the context of a high net worth divorce – are division of assets and spousal support.
Division of Assets
The divorce process must divide all assets owned by the divorcing couple. The first step is to determine whether each asset is community or separate property. Community property is property acquired during the marriage. Property acquired before the marriage, or by inheritance, is the separate property of the spouse who owned it prior to marriage. All property owned by a divorcing couple is presumed community property unless proven as separate property. Each party is entitled to his or her separate property after the divorce. The second step is to divide the community property assets according to what is “just and right,” which depends on a number of factors, including fault in the breakup of the marriage (abuse, criminal activity, adultery, etc.), custody of minor children, and the respective rights of each spouse.
A high net worth divorce will necessitate the employment of financial experts. Every asset in a marital estate must be assigned a value. In a non-high net worth divorce, the parties produce bank statements and divide their accounts accordingly. This process is much more complex when the marital estate has a high monetary value or constitutes an amalgamation of assets besides just cash. A high net worth attorney will be able to advise on the legal consequences of dividing property and the classification of each asset as community or separate. Additionally, divorce attorneys experienced in high net worth divorces know and have working relationships with pertinent experts. A business valuation expert will be required to analyze the worth of a business and the parties’ business interests. Valuable art, antiques, collectibles, personal property, and real estate must be appraised. Tax experts and financial planners can advise on the value of pensions, retirement accounts, and insurance policies. It is often advantageous to employ a forensic accountant who can trace funds, especially if funds have been moved, hidden, or intermingled. Your attorney will work with the team of financial experts to create a comprehensive inventory of your separate assets, your spouse’s separate assets, and the community property estate in order to craft a just and right division.
In high net worth divorce cases, occasionally one spouse is financially dependent on the other. If this is the case, the dependent spouse can seek spousal support to meet their needs after the marriage has ended. While commonly referred to as “alimony,” court-ordered support in Texas is legally termed “spousal maintenance.” The amount and time period for spousal maintenance can be determined by two methods – either agreement or court order.
In Texas, spousal support is not an automatic right. If a spouse wishes to pursue a claim for spousal support, the spouse must prove that he or she is eligible. Eligibility requirements include having been married ten or more years, family violence, the spouse’s disability, or the spouse caring for a disabled child of the marriage. If the dependent spouse is eligible, the Court will order an amount that is either $5,000 per month or 20% of the paying spouse’s gross monthly income, whichever is less. However, divorcing parties may agree on spousal maintenance, and thereby secure a contractual obligation to pay an amount in excess of the statutory limit a judge could order. If you seek spousal support above $5,000 per month, speak to your attorney about coming to an agreement on contractual alimony.
Talk to Hammerle Finley
If you are considering a divorce and are concerned about the division of your assets, speak with the team at Hammerle Finley Law Firm, which includes experts in divorce, child custody, real estate, business, and estate planning. You have worked hard for your assets; find the high net worth divorce attorney who will fight to protect them.