Going through a divorce can be challenging, even when you and the spouse from whom you are separating are on amicable terms. When substantial assets are involved a divorce often takes on an even greater complexity that can cause tensions to run high.
Experienced legal help is even more important for executives, business owners and other professionals who are involved in a high-asset divorce. Knowing what to expect also enables you to better prepare for the process.
What is a High-Asset Divorce?
A high-asset divorce is generally one that involves more than one million dollars in net liquid assets. These assets may include cash, stocks, bonds, precious metals, exchange traded funds (ETFs), mutual funds and money market funds. Divorces that involve more than $30 million worth of net liquid assets are considered ultra-high-asset divorces.
Equitable Property Distribution in High-Asset Divorces
In the state of Maryland, most assets that were acquired throughout the marriage will be considered marital assets. In the divorce, both spouses are entitled to what is known as an equitable distribution of the marital estate, although this does not always mean that everything will be divided equally.
For example, if one spouse retains the family home, the other may be given the vacation home or another asset that equals the value of the family home.
Equitable property distribution can be complicated, and financial experts are often required to determine the value of property in high-asset divorces. Your attorney will work with forensic accountants to determine the extent of the property involved in the divorce as well as the value of every asset. This may include:
- Properties such as the family home, vacations, rentals and timeshares
- Retirement plans, pensions, 401Ks and life insurance
- Stocks and stock options
- Business practices, trusts, partnerships and assets
- Collections of artwork, antiques, jewelry, memorabilia and vehicles
High-asset divorce attorneys will trace how the assets were treated during the marriage to determine whether they are subject to equitable distribution. For example, property that one spouse owned prior to getting married, as well as anything that they received as an inheritance or gift from a third party during the marriage, is not usually subjected to equitable distribution.
However, an exception is made if premarital and non-marital assets have been commingled with the marital asset in question. For example, if one spouse used inherited funds to cover the down payment on the marital home, that spouse should be able to receive compensation for their contribution.
As an equitable distribution state, business assets acquired during a marriage in Maryland are considered to be equally owned by both of the spouses in most circumstances, which can pose some challenges if the business was established prior to the marriage or if other partners were involved in its operation.
Maryland uses a fair market rule which sees closely held businesses assessed at a value that corresponds to what the worth of the business if it were sold on the open market. For divorces that involve intellectual property such as copyrighted or patented works, experts may be called upon for their value.
Common Issues That May be Encountered in a High-Asset Divorce
Here is a look at some of the issues that may arise in a high-asset divorce and how you can expect them to be addressed in Maryland.
The court will review a combination of factors to determine alimony; however, many high-asset divorces will see high payments awarded to help spouses maintain a comfortable lifestyle. This may be influenced by any prenuptial or postnuptial agreements that were in place at the time of the divorce.
High-Asset Spousal Support
An individual who served as the primary breadwinner for the family can expect to be ordered to pay relatively high spousal support payments. Spousal support is based on factors such as assets, property and income making it important to have everything identified and valued to ensure that the final arrangement is fair.
High-Asset Child Support and Custody
In high-asset divorces that involve minor children, Maryland state laws protect the custody interests of both spouses regardless of their individual ability to support the children. Spouses in high-asset divorces may be required to provide payments for child support that go above Maryland’s standard guidelines because of their higher level of wealth as family law judges are granted a certain degree of discretion in settling such matters.
Schedule an Appointment with the Maryland Family Law Attorneys
Accumulated assets and wealth are critical factors in divorces in Maryland, and having a reputable family attorney on your side with experience in high asset divorces is essential. The experienced Maryland family law attorneys at SIEGELLAW can answer your questions and guide you toward a solution that best serves your interests.