Unique Issues that Arise in High Net-Worth Divorces
Untangling the connections of marriage, as a couple goes through divorce, takes a significant amount of time and effort. Couples should do their best to resolve the issues of divorce privately through mutual agreement to maintain the maximum amount of control over the outcome and to limit how much information becomes part of the public record. The complexity of any single divorce will depend upon the number of outstanding issues, the level of disagreement, and how much a couple must divide. Thus, even seemingly straightforward divorces can escalate into a prolonged process if the complexity of the issues increases as things progress. This possibility is especially true for high net-worth couples seeking divorce, since each spouse has much to lose in any settlement negotiated or ordered. Issues of alimony and property division tend to be particularly difficult to resolve, often due to the diversity of income streams and assets the couple owns. Because of the stakes and how complicated it frequently is, absent a prenuptial agreement, to determine the number and value of available assets, high net-worth couples wishing to divorce will need to implement specific strategies to ensure their interests are protected. A discussion of issues unique to high net-worth divorce will be explored below.
Which Assets Matter
Couples with complex financial holdings, such as Jeff and MacKenzie Bezos, must first determine which assets are considered part of the marital estate and which would be excluded as separate property. If both spouses are knowledgeable about their assets and finances in general, this aspect of divorce can become a major source of contention, especially as no one wants to relinquish property if it is not required. In Pennsylvania, marital property is generally anything earned or acquired by one or both spouses during the marriage. However, separate property that increases in value during a marriage is also frequently divided, with the spouse who benefited from the asset but did not directly own it getting a percentage of the increase as part of the divorce settlement. As a result, this question is far from settled in many cases.
Because of the diversity and complexity of assets typically associated with high net-worth divorce, getting an accounting of all property as early in the case as possible is important to ascertaining a fair division. Many financial instruments are hard to divest, and doing so incurs significant tax consequences. Further, businesses, antiques, and other collectibles will need to be valued by professional appraisers to ensure the appropriate division of resources is made.
Pennsylvania is an equitable division State, so while an equal split is the starting point in most cases, the main concern is achieving a fair outcome. Thus, the specific circumstances of the marriage, the division of childcare, misconduct by a spouse, as well as other factors, are used by courts to make this decision if the parties cannot agree on their own. The uncertainty of a court decision is one vital reason private settlements are the preferred method of resolving this issue.
Finally, alimony is the second issue that is commonly disputed in high net-worth divorces. The party seeking support will want to maintain the same lifestyle he/she enjoyed while married, while the spouse asked to pay is reluctant to take on such an obligation long-term. However, Pennsylvania law requires spouses to financially support one another, which often translates into orders to pay alimony while a divorce is pending, and can result in support obligations post-divorce if one spouse truly needs assistance. The amount and duration are up to the court’s discretion, so it varies widely. Working with an experienced divorce attorney is the best way to know what to expect in a particular case.
Call a Pennsylvania Divorce Attorney
High net-worth couples would most benefit from the advice of an experienced divorce attorney as early in the divorce process as possible. Given the unique complications that often happen in these cases, the sooner an attorney directs the development of the case strategy, the better the outcome for you. The attorneys at the office of Barbara Flum Stein & Associates know the challenges high net-worth couples are facing, and will craft an approach that best protects your interests. Contact the Media divorce firm today for a confidential consultation.