If you or your spouse is a high net worth individual and you are about to get a divorce, it goes without saying that you have a lot at stake. Unfortunately, many husbands and fathers who’ve worked to build businesses or otherwise accumulate significant wealth over the years find it suddenly all on the line when their marriage comes to an end. For this reason, if you’re in a high net worth divorce, it is paramount that you retain the services of a skilled Staten Island divorce attorney who can effectively represent your interests and protect your hard-earned assets. Continue reading and contact Dow Divorce Law to learn about how our experienced and highly-skilled legal team can assist you.
What Is Considered a High Net Worth Divorce?
Generally speaking, if you and your spouse have substantial combined assets, investments, properties, business interests, or overall wealth, your divorce may be considered a high net worth divorce. Though there is no exact legal definition under New York law that officially classifies a divorce as “high net worth,” these divorces usually involve marital estates valued in the hundreds of thousands or millions of dollars.
Simply put, the more assets you and your spouse have accumulated during your marriage, the more issues there are that must be resolved before your divorce can be finalized. In many cases, high asset divorces involve:
- Multiple homes or real estate properties
- Investment and brokerage accounts
- Retirement assets and pensions
- Closely-held businesses
- Professional practices
- Executive compensation packages
- Stock options and bonuses
- Luxury assets and collectibles
- Cryptocurrency or digital assets
In New York State, property division during divorce is governed by equitable distribution laws. Unfortunately, “equitable” does not necessarily mean “equal.” Instead, it means something closer to what the courts determine is fair under the circumstances. Therefore, depending on the facts of your case, your marital assets may not always be divided evenly between you and your spouse.
Why High Asset Divorces Are More Complicated
Naturally, any divorce can become emotionally difficult. However, when substantial assets are involved, these divorces frequently become far more financially and legally complex as well. In many cases, there are simply more issues that must be resolved, more documentation that must be reviewed, and more disputes that arise over what certain assets are actually worth.
For example, one of the most common issues in high net worth divorces involves determining whether certain property is marital property or separate property. Generally speaking, assets acquired during the marriage are considered marital property and may be subject to equitable distribution. That being said, property owned prior to the marriage, inheritances, or gifts received individually may qualify as separate property under New York law.
Unfortunately, things are rarely that simple in practice.
For example, if separate assets become mixed with marital assets over time, disputes can arise regarding whether those assets have now become marital property. Similarly, if one spouse owned a business prior to the marriage, though the business itself may initially qualify as separate property, any increase in value during the marriage could potentially become subject to equitable distribution. High asset divorces also frequently involve disputes regarding:
- Business valuation
- Tax consequences
- Hidden assets
- Dissipation of marital funds
- Executive compensation
- Deferred income
- Offshore accounts
- Trust interests
- Prenuptial agreements
- Postnuptial agreements
Another issue that often arises is privacy. Many high net worth individuals understandably do not want sensitive financial information becoming public during contentious divorce litigation. Because of this, some couples pursue settlement negotiations or mediation to resolve disputes outside of a courtroom setting whenever possible.
Dividing Assets in a High Net Worth Divorce
Asset division is often one of the most heavily contested aspects of a high net worth divorce. Before any property can actually be divided, however, the property first has to be identified, valued, and classified properly. In many cases, this process alone can take a significant amount of time.
Real Estate Division
Many high net worth couples own multiple properties. This can include marital homes, vacation homes, rental properties, commercial buildings, or investment real estate.
When dividing real estate during divorce, New York courts may consider:
- The overall value of the property
- Mortgage obligations
- Whether one spouse wishes to keep the property
- Tax consequences related to sale or transfer
- Whether the property qualifies as marital or separate property
Business Valuation
Business ownership frequently complicates high asset divorces significantly. If one or both spouses own a business, determining its actual value often becomes one of the most important parts of the case. Business valuation experts may analyze:
- Revenue and profits
- Assets and liabilities
- Future earning potential
- Ownership agreements
- Industry conditions
- Company goodwill
Even if only one spouse actively operated the business during the marriage, the appreciation of the business itself may still be subject to equitable distribution.
Investment and Financial Account Division
Many high net worth divorces involve substantial financial accounts and investment portfolios. Naturally, these accounts must be carefully reviewed before they can be divided properly. These assets may include:
- Retirement accounts
- 401(k)s
- IRAs
- Pension plans
- Brokerage accounts
- Stock portfolios
- Cryptocurrency holdings
- Deferred compensation accounts
You should also understand that dividing certain retirement accounts may require what is known as a Qualified Domestic Relations Order, also referred to as a QDRO, to avoid unnecessary penalties or tax consequences.
Hidden Assets and Financial Misconduct
Unfortunately, it’s not rare for some spouses to hide assets during their divorce. This is something that can be particularly difficult to uncover in high net divorce proceedings, where substantial assets may be spread across various accounts or business entities. That said, some of the most common warning signs to look out for are as follows:
- Unexplained withdrawals
- Sudden transfers of money
- Missing financial documents
- Undisclosed bank accounts
- Unusual business expenses
- Underreported income
Spousal Support in High Net Worth Divorces
Spousal support, which is also commonly referred to as spousal maintenance or alimony, is another major issue in many high net worth divorces. Generally speaking, the purpose of spousal maintenance is to help preserve the standard of living established during the marriage while one spouse transitions financially after the divorce. New York courts consider several factors when determining spousal maintenance, including the following:
- The income of each spouse
- The duration of the marriage
- The age and health of both spouses
- Present and future earning capacity
- Contributions made during the marriage
- Childcare responsibilities
- The standard of living established during the marriage
Contact a High Net Worth Divorce Attorney in Staten Island Today
Here at Dow Divorce Law, we have extensive experience representing high net worth individuals across Staten Island, and we stand ready to put that experience to work for you. If you need an attorney you can depend on to fight for all you’ve built, don’t hesitate to contact us for an initial consultation today so we can discuss your circumstances and begin building a comprehensive strategy on your behalf.
