Regardless of the circumstances, divorce is often a difficult and uncomfortable situation to endure. However, the challenges can be exacerbated even further in a high asset divorce.
Here are five reasons why a high asset divorce is more complex than a traditional divorce:
#1 - Complicated Asset Division Needs
It is common for families with high-value assets to arrange them in a complex way in order to protect the funds and allow for future growth.
When considering real estate, business ownership, retirement funds, and other investments, it's easy to see how challenging dividing the assets fairly can become.
#2 - Tax Implications
It's never wise to attempt to hide or transfer assets to someone else to avoid including them in the divorce. Doing so can induce serious tax penalties as well as severely impact your side of the divorce case.
Furthermore, you may need to use some of your assets to pay for your living expenses while going through the divorce process, which a significant tax bill may also accompany.
#3 - Customized Evaluations
Adequately evaluating the value of each asset can be difficult. You and your spouse may end up with differing opinions or appraisals, which can seriously prolong the negotiation process.
#4 - Child Support
High net worth individuals experience a different child support calculation than those who go through a traditional divorce.
The typical calculations only apply up to a certain amount. When that amount is surpassed, the court gets to decide how much child support to award.
In high net worth divorces, the child's essential needs will be taken care of regardless, which means that other elements are taken into consideration.
#5 - Prenuptial Agreements
In one sense, prenuptial agreements can help simplify the divorce process. However, prenuptial agreements often prompt a severe legal battle over the terms of the document.
Additionally, the legality of the document may be questioned.
As you can see, there are many reasons why a high net worth divorce is more complex than a standard divorce. It's not advised to handle such a situation on your own—let us see if we can help.