When you tally up all the assets you and your spouse have, is the total $1 million or more? Whether it’s a healthy investment portfolio, the equity in your home or money in a bank account, that means you’re a “high-asset” couple.
If you’re headed for divorce, that also means you have unique issues that need to be addressed. All divorces include a lot of emotional challenges, but the legal and financial complexities of high-asset divorces are much more profound than those you find in other divorces. Here’s why.
The property division process can be a lot harder
When you’re dividing up vacation homes and rental properties, businesses and professional practices, stock portfolios, retirement accounts, pensions, trusts and luxury possessions, there’s a lot at stake. Determining what qualifies as marital property versus each spouse’s separate property can quickly turn contentious.
Alimony (spousal support) can be significant
When one spouse has a dramatically higher income or net worth than the other, spousal support can become a substantial issue. Determining a fair amount, and whether that amount should be made through a lump-sum payment or over a long-term plan, can require the input of more than one financial or tax advisor.
Hidden assets and a lack of financial transparency can be problems
Both parties in a divorce are expected to fully disclose their finances during the divorce process, but some spouses are resistant to the idea. It’s not uncommon for a spouse to transfer money to offshore accounts, hide their assets through shell corporations, undervalue a business or collectibles, delay their bonus payments or stock options or take other measures to deceive.
Public exposure can damage personal and professional reputations
High-asset couples can also have high profiles in their communities, and an ugly, hard-fought divorce can do significant damage to everybody’s reputation. A lot of high-asset couples actively seek to keep their business private through non-disclosure agreements and private mediation.
When you’re approaching a high-asset divorce, it’s critical to make good decisions from the start. The right legal guidance can make it easier to address your specific concerns.