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Nov 2017WHAT IS A HIGH NET WORTH DIVORCE?
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WHAT IS A HIGH NET WORTH DIVORCE?
November 1, 2017
High Net Worth Divorces
High Net Worth Divorces and Prenuptial cases involve a complex financial analysis of family assets and should require not only the advice of a skilled matrimonial attorney but also the advice of tax attorneys and financial advisors, and the New York divorce lawyer you choose should also have some business acumen.
In writing up a prenuptial agreement, if you are the monied spouse, there are asset protection strategies your attorney can employ to protect your business or partnership and to legally minimize tax exposure.
If you are going through a high net worth divorce then it is likely that there has been some sort of estate planning instruments in place such as trusts and off shore accounts that might allow your spouse the opportunity to hide assets or protect them against equitable distribution. There might also be irrevocable child trusts that have been set up for the children or for other of the spouse’s family members. This is why it is important to hire a matrimonial attorney who has experience dealing in such matters.
Furthermore, the division of property in a divorce gets particularly complicated when the asset is partially acquired before the marriage and partially acquired after the marriage. The quantification of a marital asset is fairly straight forward as parties rely upon forensic accountants to evaluate and value the asset, whether it be real estate, cash accounts, stocks or retirement accounts. What is complex is figuring out what value was acquired during the marriage, what part was acquired before the marriage and what part was acquired after the commencement of the divorce action. Usually each asset is valued as of the date of the commencement of the action but real estate is usually valued as of the date of trial or on such other day as the parties may mutually agree by way of Stipulation. However, if you are evaluating a business that was running before the marriage, you would want to get a valuation of the business as of the date of the marriage and one valuation as of the date the parties separated so you can assess what part of the business might be marital and subject to distribution.
Usually inheritances and personal injury recoveries are exempt from equitable distribution and belong to the party that acquired that asset. However, in high net worth divorces this assumption can come undone if the parties comingle that asset into a joint account and that is commonly referred to as comingling or transmutation. In cases where the separate property got mixed in with marital property the property loses its separate property characteristics and becomes marital property subject to equitable distribution.
Also, equitable distribution is not equal distribution. The Courts will often times grant more than 50% of a business to the spouse who is most actively involved in operating a complex business. I guess it is safe to say that it all depends on the role each spouse plays in the asset that is acquired, and the determination as to who gets what is very fact specific. So as to high net worth divorces, no-one’s divorce can be compared to yours as each party has a unique set of circumstances.
LIsa Beth Older
Your NYC Divorce Lawyer