If you are getting divorced, you are probably concerned about what will happen with your hard-earned assets. The emotional stress of divorce is often compounded by financial stress. If you or your spouse have a high net worth, you may be even more concerned about how your assets will be divided. What is a high net worth divorce? The term refers to divorces that involve marital property with a high valuation. If you are going through a high-net-worth divorce, it is crucial that you understand all of your options and work with an experienced New York divorce attorney.
High Net Worth Divorces in New York
A high net-worth divorce has traditionally been defined as a divorce that involves over $1 million in net liquid assets. That amount has increased in recent years, with many more cases involving multiple millions of dollars of assets. Those facing a high-net-worth divorce have much more at stake than their middle-income counterparts. The asset division process in high-net-worth divorces usually involves complex issues related to the identification, valuation, and distribution of the couple’s assets. High net worth divorces often include multiple high-net-worth assets, including multiple homes, commercial properties, business assets, and many different other types of financial assets.
In some high asset divorces, one person in the marriage does not possess the same financial standing or own as much property as their spouse. Perhaps one spouse inherited money from a relative, owns a business, or has successful investments. When one spouse has more assets than the other spouse, it can lead to disputes over the fair distribution of property. Many high-net-worth individuals spend their lives working hard to build up their assets and become financially successful.
When one or both spouses decide to file for divorce, the process is easy due to the vast wealth acquired during the marriage. There are often disputes about which property is separate property and which is marital property subject to division during the divorce. New York courts will divide marital property between the spouses based on multiple factors. The goal of property division in New York is to divide property in an equitable, or fair, way to both spouses.
How are High-Net-Worth Divorces Unique?
There are many different ways high-net-worth divorces are different from other types of divorces. Having a high net worth will drastically affect the terms of property division, child support, spousal support, and more. Understanding how high-net-worth divorces are different from other divorces will help you make better decisions about your legal rights during this time. Working with a high net-worth divorce attorney can help you obtain a fair settlement, keeping the hard-earned property you deserve.
What Assets are Considered in a High Net Worth Divorce?
In a high net-worth divorce, courts will rigorously examine both spouses’ financial records. They will attempt to establish a clear picture of how their marriage functions financially. You may be concerned that your spouse is hiding income or assets in an attempt to keep them safe from being divided during the divorce process. If your spouse is caught either incorrectly submitting information or hiding assets, he or she could be subject to an investigation by the IRS. Some of the assets commonly called into question and high-net-worth divorces include the following:
- Shared businesses, business investments, or partnerships: if one or both spouses own a business, the business itself may be subjected to equitable distribution in the divorce process.
- Retirement accounts are often some of the most valuable assets a couple has. 401 case, pension accounts, and other retirement benefits are typically considered shared marital assets, so they are subject to being equitably divided during a high net-worth divorce.
- Real estate and property holdings such as your primary residence, vacation homes, timeshares, and any other property you may own could be subject to division and a high net-worth divorce.
- International or out-of-state assets: If you were your spouse conduct business in a foreign nation or outside the state of New York, you could face tax penalties in the event of a divorce
Separate Vs. Marital Property
The first step in dividing property in a high-net-worth divorce involves identifying all of the assets involved and categorizing them. There are two categories of assets in a divorce — marital property and separate property. Marital property typically includes any assets acquired after the marriage. Marital property will be divided between the spouses during the divorce. Separate property includes property that one spouse acquired before the marriage. Additionally, separate property includes property gifted or inherited by one spouse during the marriage. In high-net-worth divorces, a spouse may argue that an asset is a separate property to avoid losing it during the divorce.
Protecting Your Assets in a High-Net-Worth Divorce
Spouses involved in a high net-worth divorce in New York have more property at stake that will be divided. Making a mistake in your legal strategy could have serious financial consequences. One of the best ways to protect your assets is to talk to an attorney before starting the divorce process. A high net-worth divorce attorney will help you determine what assets should be divided and how you can present your case in a way that maximizes the property you keep after the divorce is finalized.
Contact an Experienced High-Net-Worth Divorce Attorney
High-net-worth divorce cases pose many challenges that require an experienced attorney. If you are contemplating getting divorced and you or your spouse have a high net worth, it is crucial that you work with a skilled attorney. Attorney Jayson Lutzky has decades of experience representing clients in high-net-worth divorces. He understands how much is at stake in your divorce case and will advocate aggressively for the best outcome possible. Contact the Law Offices of Jayson Lutzky today to schedule your free initial consultation.