A high net worth individual is typically considered to be someone who owns $1 million or more in liquid assets. Many high net worth individuals have this money in a form that can be quickly converted into cash such as a savings account, stocks, bonds, and/or a certificate of deposit.
When one or both parties in a marriage is a high net worth individual, and they are approaching a divorce, they should be aware that their divorce may not follow the traditional process. This is due to the numerous assets that will need to be settled. It is a great reminder to take the necessary steps to protect assets including a consultation with an experienced divorce attorney. For those that find themselves in this situation, we have outlined a few of the ways a high net worth divorce can differ from a traditional divorce:
- The divorce process may take longer.
A couple approaching a high net worth divorce should be patient as the process can take much longer than a divorce which involves fewer assets. With this in mind, we advise our clients to avoid making decisions based only on the desire to have the process be over because doing so can lead to an unwanted outcome, which can cause financial hardship down the road.
- There may be tax implications.
The settlement process may involve new financial transactions with notable tax consequences. High net worth divorces involve property transfers, asset liquidation, and possibly alimony, which can change your tax liabilities. Property or businesses in other states and countries also pose new legal and financial challenges in a divorce settlement. Leaning on an experienced attorney is key to ensure the right financial moves are being made.
- The assets are more complicated.
High net worth couples typically own small businesses, professional firms, real estate holdings, and/or investment portfolios. Planning for a high net worth divorce entails detailed financial and accounting work, and a full and accurate inventory of the assets each spouse owns. Those involved will need to gather all information relating to the assets, liabilities, and income of the estate. In addition, there is always a chance that one spouse may be hiding assets or understating the value of items like artwork or business property.
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- The right representation matters.
This may be an obvious one, but attorneys play a significant role in high net worth divorce cases. It is important to find an attorney with the right experience—especially one who can lean on their experience from other high net worth cases. Such attorneys can assist you with the equitable distribution of marital assets, including property, business interests, family holdings, medical and other professional practices, retirement accounts and pensions, marital residences, life and health insurance policies, and more.
Divorce is not an easy process, and it only gets more complicated for high net worth individuals. With more at stake, there are more issues to contest, and more time and energy spent on protecting your best interests. Being aware of the process ahead, while having an experienced divorce attorney on your side, can set you up for success.
For information about what our experienced attorneys at Wilder Mahood McKinley & Oglesby can do to help you in your high net worth divorce, contact us online or call our office in Pittsburgh, Pennsylvania, at 412-261-4040.
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