What determines whether a divorce should be classified as a “high-net-worth” divorce? It is largely subjective, as a high-net-worth is often shorthand for a rather complicated divorce. That can be misleading, as divorces involving relatively few assets can be complex and contentious in different ways.
However, to the extent there’s an accepted threshold, divorces involving at least $1 million, or more, in assets are usually considered to be high-net-worth. As we explain below, there are four major ways that high-net-worth divorces are unique.
1. There are usually a lot more assets to inventory and distribute.
This is fairly straightforward: The more marital assets spouses have to sift through, the higher-net-worth the divorce will be. Keeping track of marital assets, which are most items obtained by either spouse during the marriage, is easy and quick for some spouses. That’s rarely the case for couples going through high-net-worth divorces. Additionally, high-net-worth divorces often involve non-tangible, appreciating assets, which require the help of financial professionals who specialize in various types of valuation (e.g., real estate appraisers and business valuation specialists).
Florida law requires for marital assets to be divided fairly and equitably. This does not always mean an equal split.
2. Prenuptial and postnuptial agreements come into play during many high-net-worth divorces.
Although these marital agreements can be effectively used by couples regardless of income and net worth, prenups and postnups are more frequently used by wealthy couples. These legal contracts can help couples come up with settlements, as they can include provisions for asset distribution in the event of a divorce. Before acting on the terms of the prenup or postnup, though, the court must verify that the contracts are enforceable. There are a few ways they could be found invalid, such as:
- Being egregiously one-sided;
- Having been signed under duress or false pretenses;
- Corresponding with outdated laws,
- Having not been properly executed; or
- A lack of proper financial disclosures or knowledge of each other’s finances.
3. Alimony is usually appropriate.
Some divorcing couples in Florida are eligible for an expedited divorce process referred to as a “simplified dissolution of marriage.” In these situations, couples may not seek alimony. In a high-net-worth divorce, spouses rarely agree to forego alimony. One spouse is usually responsible—mainly or solely—for the lavish lifestyle.
There are several factors Florida courts consider when determining alimony, including the standard of living maintained during the marriage, each spouse’s earning potential and financial resources, and any tax consequences for either spouse. You can count on experiencing multiple taxable events after reaching a settlement in your high-net-worth divorce.
4. High-net-worth divorces simply take longer.
Divorce is a highly impactful and major life event for anyone—no matter how long the legal process takes. Between the numerous assets, financial professionals, and complex property-division considerations, though, an inescapable truth is that a high-net-worth divorce usually takes longer. The financial stakes are higher.
For these four reasons (and many others), it takes an experienced and knowledgeable attorney to guide you through a high-net-worth divorce. Our team knows the importance of getting through divorce with as little stress and contention as possible, but we’re also prepared to fight for your interests when necessary. We’re ready to provide you with a confidential consultation today. Call us at (954)-447-2580 to set it up.
