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Common Complications of a High-Net-Worth Divorce

No matter what the circumstances are, a divorce is a challenging experience for families. For affluent couples, getting a divorce is typically far more complicated. Because the couple has more assets and property, they are likely to encounter unique complications for several reasons. In this guide, our Montgomery County divorce lawyers explain these complications.

Understanding How High Net Worth Divorces are Different

High-net-worth divorces can be more intensive compared to regular divorce cases because of the spouse's income, the property they own, and the value of their assets before or during the marriage. Couples with a significant net worth naturally have more property, and they will have to decide how to divide it in the divorce - making the stakes much higher.

In addition to the spouse's income, several types of assets must be factored into a high-net-worth divorce. These may include:

  • Inheritance or trust
  • Real estate investment
  • Ownership of a business
  • Ownership of a professional practice
  • Retirement accounts
  • Stocks, bonds, and other investments
  • Real property, including homes, vehicles, boats, jewelry, expensive artwork, etc.

Some assets, like art or jewelry, may have a one-time value once appraised and sold. However, other assets like a business or real estate purchase could provide an ongoing source of income. Additionally, some assets could incur costs over time.

Therefore, it's essential to understand each type of asset and its current and future values during the division of assets. Understanding this information is vital in ensuring each spouse comes out of the divorce with property that fits their needs and lifestyles.

Complications of High-Net-Worth Divorce in Pennsylvania

There are several complications of high-net-worth divorces that affluent individuals should understand before starting the divorce process. Common complications of high-net-worth divorce include:

Identifying the Type of Asset: One of the most difficult aspects of a high-net-worth divorce is identifying assets. There are two types of property in a divorce, separate property and marital property. Any property the spouses owned before marriage is separate, and it cannot be divided in the divorce. Only marital property is subject to property division.

However, things can become complicated if the couple's separate property commingled with marital property. It's crucial to correctly identify assets to ensure that each spouse receives an equitable amount of property in the divorce.

Evaluating Large Assets: Assets must be properly valued to determine how to divide them in a divorce. This can be challenging in a high-net-worth divorce for many reasons. For example, if one spouse owns a business, they will have to enlist a business expert to accurately determine the business's value.

This means collecting and turning over several financial records. Additionally, there may need to be evaluations done for investments, intellectual property, stocks, retirement accounts, and other high-value assets. These will require careful analysis by a trusted expert who can prepare a written appraisal.

Spousal Support: It's not uncommon for spousal support to be awarded in a divorce involving high-net-worth couples, especially if there is a large disparity between spouses' income. For example, if one spouse left the workforce to help parent, run the home, or assist the other spouse's business while the other worked, alimony would most likely be ordered.

Forensic Accounting: In a high-net-worth divorce, some spouses will try to hide assets in order to prevent them from being taken from them in the divorce. Therefore, it may be necessary to enlist help from a forensic accountant to determine the spouse's financial holdings and history. Additionally, forensic accountants can help assist with determining separate and marital property.

Publicity: Couples with a substantial amount of assets may become more newsworthy to the public. This is common with well-known couples, celebrities, politicians, philanthropists, or other members of the social elite. In these cases, the community may be more inclined to want to know about the details of the divorce.

Journalists might start reporting on the case, and couples could have difficulty keeping their affairs private, which can cause additional stress. A family law attorney can discuss options to minimize unwanted attention and protect a high-net-worth couple's privacy in situations like this.

Longer Divorce Proceedings: Because of the complexities of assets in a high-net-worth divorce, it's not uncommon for them to take longer to settle when compared to the typical divorce case. It can take some time to value assets and identify whether they are separate or marital property. High-net-worth divorces are typically more contentious as well, meaning long, drawn-out court battles.

Speak to a High-Net-Worth Divorce Attorney

At Testa & Pagnanelli, LLC, we understand that every divorce is different, especially for those with high-net-worth divorces. Our skilled, attentive, and responsive attorneys are ready to take on your case and guide you through the entire divorce process. We will thoroughly examine the details of your case, help you determine and identify all assets, and protect your rights as you navigate your high-net-worth divorce.

Call us today at (610) 365-4733 to schedule your confidential consultation with our high-net-worth divorce attorneys.

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