Divorces are emotionally charged, and typical divorces, those without high-valued assets, are far less complex than high net divorces. Complexity is derived from having more assets to fight over, and these asserts will lead to delayed proceedings and courtroom battles because there is more at stake.
Financial assets can also be more complex in nature as well.
Business owners that may own a 60% share of a business will likely have a prenuptial agreement signed prior to marriage, but if they don’t, this can be a complicated matter. The business may state that the shares would not be able to be transferred under the business agreement, and the business may not want the spouse to have a vote over business matters.
In this case, the spouses would likely go to court or need to work out a current financial estimate of the business wherein a large lump sum payment would be made instead of taking a portion of the business.
And there are also other concerns. A good example of this would be a business that was formed prior to marriage, but was not off the ground yet. If one spouse supported the other spouse running the business, put money into the business and helped with day-to-day operations, there is a chance that this spouse, the new owner of the business, can fight for a portion of the business. Even if a prenuptial agreement was made, the courts may see the non-owner spouse as a vital reason for the business’s success, and the business may now be considered marital property.
There are even more complex matters to be concerned about:
- 401 (k) plans
- Stock options
- Pensions
- Properties
- Real estate
- Trusts
- IRAs
High Net Worth Divorces Lead to Higher Error Margins
The longer a high net worth divorce drags on, the more errors that can occur. Mistakes on either side are amplified because these proceedings can take months or years before a resolution is made.
A common mistake that is often made is hiding or not disclosing assets.
Hidden bank accounts or high-valued assets that you may deem your own, such as a sport’s car you only drive, cannot be left off of an asset sheet. Neglecting to share any property during the proceedings will cause a spouse to lose credibility in the courts.
Hidden assets also need to be investigated.
There is a chance that there are assets that you are unaware of, especially if you’re in a relationship where financial matters are not a joint responsibility. There will also be tax liabilities from account distributions that need to be considered.
The Micklin Law Group, LLC is a New Jersey law firm specializing in family law and estates. Attorney Brad Micklin was recently named to The National Advocates list of Top 100 attorneys from each state. Brad has a special expertise in working with high asset divorces. You can read more on this topic by visiting our Divorce blog. To set up a consultation, call 973-562-0100.
