What is a High Asset Divorce?

A high asset divorce, also referred to as a high net worth divorce, is one that involves a substantial amount of assets. This can give rise to complex legal issues, complicated financial considerations, privacy concerns, and tax consequences, making the stakes much higher than in a typical divorce. If you are parting ways with your spouse and either of you have significant assets, it’s essential to have the legal counsel you need to help you navigate the divorce process — and ensure your financial interests are protected.

How is Property Divided in a High Asset Divorce?

Property in a high asset divorce is divided in the same way as a traditional divorce. New York State applies the doctrine of equitable distribution to ensure that marital property is divided in a manner that is not necessarily equal, but fair to both spouses. However, the property involved in these matters is often much more complicated to divide. In many cases, appraisers are often needed to determine the value of certain assets in a high-net-worth divorce to ensure a fair distribution.

It is not always necessary to have the court decide property division matters in a divorce case involving significant assets. The parties can work to negotiate a settlement agreement outside of court. In doing so, spouses can decide how their marital property would be divided, rather than let a judge determine the outcome.

Importantly, if you are bringing a substantial amount of assets into a marriage, it may be in your best interests to consider a prenuptial agreement. These contracts can outline financial expectations for the marriage and specify the division of any property in the event of divorce. They can also delineate which property should be considered marital assets, versus separate assets. In the event you did not execute a prenup prior to marriage, you and your spouse can enter into a postnuptial agreement at any time during the course of your marriage to address the same issues.

Considerations in a High Asset Divorce

Although the process for a high asset divorce is the same as for a traditional divorce, the amount of wealth involved in these cases requires careful consideration. In a typical divorce, asset division usually revolves around dividing property such as the marital home, bank accounts, and vehicles, cases involving a substantial amount of assets are much more complex. There can also be tax implications that should be assessed when negotiating the settlement agreement.

Specifically, a high asset divorce can involve the following:

• Real estate holdings — Not only can a high asset divorce involve the question of how the marital residence will be divided, but these cases can also include the division of vacation homes, commercial properties, land, and investment properties.
• Business interests — There are usually business interests that come into play in a high asset divorce. Businesses can be complex to value and a financial expert may need to be brought into a case to determine how much the asset is worth. A business can be divided in one of several ways. For instance, the company may be sold and the spouses split the profits, or one spouse may buy out the other. If spouses are amicable, they might consider continuing business operations together.
• Investments — Investment portfolios that are comprised of stocks, bonds, mutual funds, hedge funds, and various other financial tools can make property division much more complex.
• Retirement accounts — There are many factors that must be considered when it comes to dividing a retirement account in a divorce, including which portion would be considered separate versus marital property. Depending on the type of account, a Qualified Domestic Relations Order (QDRO) may need to be used to divide these assets.
• Intellectual property rights — If intellectual property was created during the marriage and a prenup or postnup does not specify otherwise, it may be considered a marital asset that must be divided in divorce.
• Luxury assets — Often, high asset divorces involve luxury assets that can be difficult to value and contentious to divide. These can include artwork, jewelry, vehicles, collectibles, and other substantial assets.

Another consideration in a high asset divorce can include the issue of spousal support. The higher earning spouse may be required to pay support to the financially dependent spouse. In addition, while full financial disclosure is required in a matrimonial proceeding, some high-net-worth cases may involve hidden assets — this can make the discovery process lengthier and more complicated.

Using Mediation or the Collaborative Process in a High Asset Divorce

One of the major concerns many high-net-worth couples have when they divorce is privacy. To address these matters, couples might consider using an alternative dispute resolution method such as mediation or the collaborative process. This can keep the case out of court — and the proceedings would not become part of the public record. Couples can also sign non-disclosure agreements which would prevent either from divulging the financial details of their divorce to any third party.

Mediation uses a neutral third party called a mediator to help the parties communicate effectively and guide them to reaching a settlement. The collaborative process uses a team of professionals who can help ensure spouses are informed about their options and find tailored solutions to the practical, financial, and family issues that must be decided in their case. Mediation and the collaborative process can allow spouses to find creative solutions that might not otherwise be available in the courtroom.

Contact an Experienced New York High Net Worth Divorce Attorney

If you are facing a high asset divorce, having a skillful family law attorney by your side is critical to safeguard your financial interests and ensure a fair outcome is reached. At Duke Law Firm, P.C., we provide our clients with compassionate and trusted representation for a variety of divorce and family law matters, including those involving high-net-worth divorces. We welcome you to contact us today to schedule a consultation to learn how we can help.