How Do High Net Worth Divorces Work?
Divorce is already a stress-inducing time, but when high levels of wealth are involved, things can get even tougher. High net worth divorce is a situation that requires the attention and expertise of an experienced attorney. Smith Legal Group assists clients with high net worth divorces in Henderson, Nevada, and the surrounding areas. Here, we’ll discuss how property is typically distributed in a divorce, what it means to live in a community property state, and what factors make high net worth divorce particularly tricky.
How Property Is Normally Divided in a Divorce
In a divorce, all property is divided into two categories: separate and marital. Separate property usually refers to anything owned by one spouse before the marriage. The marital property, on the other hand, includes everything that was bought during the union. Each state has its laws regarding how marital property is distributed.
Nevada Is a Community Property State
A community property state means that all assets and debts acquired during the marriage belong to both spouses equally. So, when it comes to dividing marital property, both spouses get a 50-50 share in Nevada. As a high net worth couple, this can get complicated. Substantial assets, large estates, and family-owned businesses come under scrutiny for division. The challenge lies in accurately valuing these assets. Furthermore, the differentiation between marital and separate property becomes complex, especially with commingling of assets. High net worth divorces also bring into focus potential tax implications following asset division. So, net worth significantly impacts the community property division process of any divorce.
Challenges Unique to a High Net Worth Divorce
In high net worth divorces, unique challenges often emerge. The complex process of valuing and dividing substantial assets, such as business holdings, real estate portfolios, and investment accounts, can lead to intense disputes. The identification and division of marital versus separate property becomes significantly more intricate. Furthermore, the potential for hidden assets increases, necessitating thorough financial investigations. Privacy concerns also escalate due to the public nature of divorce proceedings. Alimony and child support calculations, usually based on income, can become contentious given the higher incomes involved. On top of that, the tax implications associated with large asset transfers can complicate the divorce process.
Spousal Support and Lifestyle
The determination of spousal support or alimony in high net worth divorces is not formulaic. The court orders “just and equitable” monetary payments from one spouse to another post-divorce, separate from child support and asset distribution. Factors considered include the standard of living during the marriage, each spouse’s income and earning capacity, and the needs of the spouse seeking support. In high net worth divorces, larger alimony payments become a possibility. Nevada’s status as a community property state means that income earned by either spouse during the marriage is shared. Additionally, in high net worth circumstances, the recipient’s lifestyle during the marriage is a significant factor.
Another challenge that arises in a high net worth divorce is determining who has ownership over an asset. Sometimes, ownership is not clear. For instance, a family business that one spouse built before the marriage may still be subject to division if the other spouse has played a critical role in its growth. In such situations, a high net worth divorce attorney can work with professionals to accurately value the asset.
Dividing Value in a Community Property State
When you are going through a high net worth divorce in a community property state, dividing property and assets can be a challenging process. Property and assets have to be accurately valued before they can be divided. That’s why you need a high net worth divorce attorney to help you navigate the fair division and distribution of any asset. Often, one spouse wants to retain all of an asset, such as a house. In exchange for the other spouses’ half of the house, they negotiate a reduction in their share of another asset or monetary distribution.
Schedule a Free High Net Worth Divorce Consultation Today!
High net worth divorce is a complex process that necessitates skilled legal representation. It is particularly crucial to work with a high net worth divorce attorney for investment or business-related disputes. Our team of expert attorneys at Smith Legal Group can assist you in achieving a fair and equitable outcome by accurately valuing assets, determining spousal support and ownership rights, and navigating community property state laws. We even offer flexible appointments on weekends and evenings. Schedule your free high net worth divorce consultation today.