Although the wealth of the parties involved in a divorce does not legally impact how a judge applies the law during proceedings, there is no denying the fact that the relative wealth of the spouses involved in a divorce can have a significant influence on the ultimate outcome of the process.
A high net worth divorce often involves more complicated issues than a divorce that include less assets. This is because the larger amounts of money involved in the division of property, and child support/alimony determinations, mean that there are significantly more economic consequences that must be considered.
Transferring assets can have significant tax consequences, which is why individuals who are involved in this type of divorce should seek divorce attorneys who regularly manage high net worth divorces.
Property Division in A High Net Worth Divorce
Couples who have a high net worth typically have significantly more assets and property than a typical divorcing couple. As a result, the division of property is typically more complex and may be more contentious when so much is at stake.
Assets that are acquired during a marriage by either of the spouses are generally considered marital property in the state of Maryland. However, any gifts or property that were given directly to one of the spouses are not considered marital property.
Maryland state law specifies an equitable distribution of marital property. This does not technically mean equal, which means that one spouse could end up obtaining a bigger portion of the couple’s estate.
For example, one spouse receives the family’s home while the other receives the vacation home despite one of the properties carrying a significantly higher market value.
When couples can’t agree on how marital property should be divided without a court order, some of the factors the court may consider are what each spouse contributed to the estate, whether and how each spouse contributed to the breakdown of the marriage, and whether there are debts associated with the marital property, among other factors.
The Need for Financial Experts
Couples who have an extensive or complicated financial portfolio often need to enlist the assistance of independent professionals to value assets such as real estate investments, vacation homes, antiques, art, stock portfolios, investment accounts, retirement plans, pensions, professional practices, businesses and investments in foreign countries.
A precise valuation is essential because the valuation and distribution of all of these types of assets may also impact the decisions made about child support and alimony. In awarding alimony, the court will consider the value of the marital assets as well as the income of the couple.
An alimony award that is based on an inaccurate valuation of the marital assets could lead to an inequitable distribution of property. For this reason, family law attorneys will often call on experts in investment management, forensic accounting and real estate appraisal to help ensure a fair settlement.
When one or both spouses own a business, it is useful to work with attorneys who have experience working with business owners. A divorce may result in one spouse claiming an interest on their part of their spouse’s business, which can be very complicated, particularly when the business in question has additional owners to consider.
Should the spouse who claims an interest in the other spouse’s business be awarded a share of it as part of equitable distribution, it may be necessary to dissolve the business, which can create considerable issues with the business’s other owners.
Another area in which high net worth divorces can be different is related to child support. Maryland child support is calculated in accordance with the child support guidelines dictated by the state; however, parents who have a high net worth may end up paying significantly more than the limit outlined in the guidelines. The court is given discretion to depart from these guidelines in cases where the combined adjusted gross income of the parents exceeds $15,000 per month.
Another problem that can arise in a high net worth divorce is hidden assets. In some cases, one spouse may be tempted to hide valuable assets to avoid sharing them with their spouse. For example, they may claim an asset was lost or ask another family member to hold onto it until the divorce is over.
If one spouse suspects that the other is engaging in this deceptive practice, they can hire a forensic attorney. Should hidden assets be uncovered in their investigation, the dishonest spouse could face major consequences, including being ordered to pay the legal fees of the other spouse.
Contact the Maryland Family Law Attorneys at SIEGELLAW
At SIEGELLAW, our experienced Maryland family law attorneys are prepared to perform high asset property negotiations, assist with business valuations and ensure your interests are protected throughout your case. Contact us today to request a consultation.