Every divorce has complex legal issues coupled with emotional hurdles. High-asset or high-net-worth divorces can be even more complicated. High-asset divorces require extra care and attention for issues like property evaluation, business ownership determinations, property division, alimony, and tax impacts. These divorces may be higher profile and take longer than other divorces because of the high number and value of assets. There are several things to consider before beginning a high-asset divorce.
Examining and Categorizing Assets
Any divorce requires documentation of assets and debts. This is even more essential in a high-asset divorce, as the court or mediation proceedings will require a thorough understanding of all the separate and marital assets of both parties.
In general, marital assets are any assets obtained during a divorce, and separate assets are those obtained before marriage or after separation. There are some exceptions, and if an asset appreciates in value throughout a marriage, that value may be considered marital property.
All assets need to be accounted for to properly value them and ensure that both parties have a fair amount of marital assets upon separation.
It’s common for those entering into high-net-worth marriages to sign a marital agreement, such as a prenuptial or postnuptial agreement. This agreement, if considered fair and valid, will be upheld by the court for the division of assets. A marital agreement may state how certain assets are categorized or may otherwise divide property.
Hidden assets are more common in contentious and high-asset divorces. A spouse may want to ensure that they hold on to certain assets, or they may want to prevent their spouse from getting a fair amount of marital assets. High-asset divorces often require attorneys, accountants, and financial investigators to ensure that a spouse is not hiding assets.
It is very important in high-asset divorces for assets to be accurately evaluated. However, the assets in these divorces are often more difficult to value, as they may include business, stocks, intellectual property, professional degrees, or other items that do not have a set and liquid value. Professional business and financial evaluators are a necessary part of most high-asset divorces. An accurate evaluation of the separate and marital property of both spouses ensures a fair division of assets.
High-net-worth divorces have significant tax implications. There may be tax consequences related to:
- Transferring assets
- Alimony payments
- Business entities
- Benefits plans
Any divorce will have these tax consequences, but the amount will be much higher with higher-valued assets. It’s essential to work with a high-asset attorney and knowledgeable tax professionals to ensure that the process minimizes the tax implications of the divorce.
Spousal maintenance and child support payments are often included in a divorce. However, proceedings are not the same for high-asset divorces. When parents have above a certain gross income, the typical child support calculations may no longer apply.
Similarly, spousal maintenance may not be calculable by usual formulas. Divorce can drastically alter one spouse’s way of living if they didn’t earn the same as their spouse. The court will have to take into account the expenses and standard of living that a spouse or child is used to.
Length of Proceedings
High-net-worth divorces are likely to take much longer than other divorces. The valuation and division of assets will make the process take longer. Because the legal proceedings take more time, temporary orders are likely necessary for child custody or spousal maintenance. These divorces also require more negotiation if done outside of court. It’s important to remain patient throughout the process, as rushing it can result in further complications with orders or losing out on assets you deserve.
Cost of Proceedings
A high-asset divorce is going to be more expensive because of the greater complexity and length of the proceedings. Attorney costs are likely to be higher because experience is a necessity to properly handle a high-asset case. Additional professionals are needed, including evaluators and investigators, which add to the cost. If the divorce goes to court, rather than mediation, it becomes very expensive.
Q: How Are Assets Split in a Divorce in Missouri?
A: Missouri is an equitable distribution state, which means that marital assets are split equitably, not evenly. Although assets may be split 50/50, the court reviews several factors to determine what is a fair distribution. If spouses create their own separation agreement out of court, they do not have to adhere to equitable distribution. As long as the court determines that the division of assets is not unfair against one party, it will enter the separation agreement into the court for enforcement. A couple is also not subject to equitable distribution if they have a marital agreement.
Q: What Is Considered Marital Assets in Missouri?
A: Marital property is any property or assets obtained by spouses during their marriage. Exceptions include gifts or inheritance provided to one spouse, which would be deemed separate property. Separate property is not to be divided, but it does need to be evaluated to ensure a fair separation of marital assets. Separate property are assets acquired before the marriage or after the date the couple separated. Separate assets can be converted into marital assets through transmutation or commingling.
Q: What Is the Wife Entitled to in a Divorce in Missouri?
A: Both spouses have equal legal rights in a divorce, regardless of gender. Under Missouri’s equitable distribution laws, the court will determine, based on several factors, what is a fair distribution of assets. These factors include:
- The contributions each spouse made to marital property, financial or otherwise
- The value of each spouse’s marital property
- Each spouse’s income, financial resources, and earning capacity
- If either spouse’s misconduct impacted the value of marital assets
Q: Are Bank Accounts Marital Property in Missouri?
A: In most cases, separate bank accounts are considered separate property, and bank accounts under both spouses’ names are considered marital property. If a separate bank account was made with marital funds, it will likely be considered marital property. The court will assume that any property gained during a marriage is marital property unless documentation and asset tracing prove otherwise. If separate assets were commingled into a shared bank account, and spouses cannot trace individual assets, it will be considered marital property.
Representation in High-Asset Divorces
An attorney who is experienced with high-net-worth divorces is a strong asset in making one go smoothly. At Stange Law Firm, we have worked with individuals dealing with high-asset divorces and understand the unique complexities involved in these situations. Contact our team today.