Vital Things People Often Forget When Planning a High Net Worth Divorce
Divorce is often emotional, complicated, and a lengthy process. There are several key components of a divorce that many do not foresee or think to plan for. This is why it can be so advantageous to engage with an experienced divorce attorney from the start who can help you strategize the best steps forward and who can help you in identify potential pitfalls and help you seamlessly navigate through them. This article provides some key details that are often forgotten or misguided by individuals planning to proceed with a high net worth divorce.
- Beware a Sudden Spending Spree
No one knows precisely where they will land post-divorce settlement. This means some individuals might be tempted to rack up unnecessary expenses or lavish items that are not a normal purchase. In cases of high net worth divorces, this drive may occur even more frequently, particularly if one partner generates significantly more income than the other. After all, fear of the unknown can make people act in ways that are out of their normal character.
There is no one-size-fits-all answer for why this may happen. However, some common (misguided) rationales behind this type of spending include:
- A belief that spending like this during the course of the marriage and shortly before separation will give the appearance that the marital lifestyle is higher than it really was – therefore increasing the support obligation of the breadwinning partner.
- The thought that the spouse can hoard, hide, or otherwise accumulate these items in a way they could not post-divorce.
- An insecurity that the other partner will engage in deceptive practices, so they are just “leveling the playing field” with their own efforts to retain assets.
Taking reasonable but firm steps, with the advice of an attorney, can help to curb unnecessary spending. After all, there will be enough unavoidable expenses ahead during the divorce process.
- Calculation of Child support and Spousal Support May Differ
Do not assume that child support obligations of high-net worth individuals will be calculated using the formula utilized in your run-of-the-mill divorce.
Most importantly, the court’s duty and utmost obligation is to ensure the best interests of the child. If utilizing the state’s formula would result in an unfair support order that is not in the child’s best interest, then that will not be how the obligation is determined.
- Plan for Attorney’s Fees and Other Professional Costs
Someone newly facing a divorce may be blinded by the obvious expenses divorce incurs. These expenses are real and do need to be considered. A high net worth divorce will likely involve complex and valuable assets that will need to be valued and divided. There are potentially real estate portfolios, business interests, reputation considerations, etc. There is a lot to unpack, analyze, and manage as the spouses seek to come to an agreeable marriage dissolution.Depending on the specifics of the case this will likely require hiring the services of not only attorneys, but potentially forensic accountants, tax specialists, business appraisers, real estate appraisers, etc. Even in the most amicable and swift cases – there will be court fees along with any attorney’s fees. Additionally, depending on the circumstances, one spouse may be ordered to pay the attorney’s fees of the other.
While this all may seem overwhelming, remember that divorce is a process, and everything is taken one step at a time. And it’s important to remember that you have a level of control over how expensive the divorce will be. Knowing what issues are worth fighting for and where to negotiate can help tremendously in ushering in an agreeable settlement at a lower cost.
- Remember: “Final” May Not Mean Permanent
It is important to remember that a “final” divorce judgment can be reopened and reexamined under several situations such as a marital asset was hidden or not disclosed, there is a material change in circumstances in a child’s life necessitating a change in custody or visitation, or there is a material change in circumstances in the prior spouse’s income necessitating a change in child and or spousal support. Be aware that this possibility exists, and work with an experienced high asset divorce attorney to ensure you are making the decisions that best serve you and your family – both now and into the future.
Contact Cardwell Steigerwald Young, LLP
Our experienced team of San Francisco high net worth divorce attorneys have aided countless clients in achieving their aims in high asset divorce cases. Contact our office to begin working with our team.
Source:
selfhelp.courts.ca.gov/divorce/property-debts
