Common Issues in High-Net-Worth Divorces

There is no gainsaying that divorce comes with emotional and psychological distress. The legal proceedings are also contentious, tiring, and complex. The most complicated aspects are child custody and the division of marital assets. 

The process is even more complicated and challenging for couples with numerous assets with high monetary value because more issues are needed. While the 50-50 property division laws in places like California may appear straightforward, it is typically tedious to determine the potential value of some given assets before division. 

Such situations may cause going back and forth. All these challenges constitute a hardship for high-net-worth breakups. Without an experienced attorney to guide you, you will find the process emotionally and intellectually tiring. 

What Separate Assets and Marital Assets Entail

In some places, where community property laws operate, the law regards a married couple as a "community." It means they jointly own all real properties and assets they acquired during the years of marriage, even if they are all in one partner’s name. 

However, the following are exceptions to community property in marriage:

• All gifts that people and institutions gave to only one spouse
• An inheritance that a spouse acquired only in their name
• The property a partner owned before marriage which neither received any improvement nor investment from the other partner during the union

Other assets and liabilities belong to both partners, and their sharing will follow the 50-50 division principles during a breakup in a community property state. In certain situations, the properties a couple owned before the marriage are part of marital properties because they have substantially increased in value during the union. If this assertion sounds confusing, you must contact an experienced divorce attorney in your locality to guide you.

Typical Assets Subject to Division

For certain separating partners, sharing their marital assets will entail addressing issues like their vehicles, matrimonial home, and household items like appliances and furniture. But spouses with high net worth have more items such as enterprises, retirement packages and benefits, antiques, heirlooms, jewelry, real estate, vacation homes, stocks, bank accounts, artwork, investments, and intellectual property to share.

Without mincing words, dividing these assets is complicated and will take more time without the involvement of experts. Each party typically wants the lion's share, causing unnecessary disagreements and delays. 

Determining Value in a High Net Worth Divorce

Most times, high net-worth breakups need the input of financial experts to assess every aspect of each property and asset to establish its source and if it is a joint or separate asset. Issues and disagreements usually arise during the sharing process when lawyers to estranged couples negotiate to determine the assets that are equal in value. 

Couples have different options for dividing certain assets. The negotiation may take any of the following forms:

• Trade an asset a partner wants to keep with another of equivalent value
• Pay each other directly for the asset they want to keep
• Sell a property and share the gain equally

Many high-net-worth breakups involve a complex mixture of the above mentioned options until each partner walks away with as much as 50 percent. Disagreements usually occur when both couples wish to keep the same asset or property because of sentiments. 

Also, an issue arises when the estranged couple cannot divide some assets on a 50-50 basis. That is why independent financial experts and attorneys representing the divorcing parties usually have a tough time during a high net-worth divorce. 

Solving Spousal Support in High Net-Worth Divorces

Another typical debatable issue in high-net-worth divorces is spousal support. “If a spouse sacrifices the opportunity to build a career to raise kids and care for the home or a partner is financially dependent on the other, they are entitled to spousal support. If both parties cannot agree, the court will decide for them.” says Attorney Paul Riley of The Riley Divorce & Family Law Firm.