A significant concern for many divorcing couples is how their assets will be divided amongst each partner — this is especially true for couples facing a high asset divorce. Divorcing couples with more than $1 million in liquid assets typically consisting of properties, business shares, and overseas assets is considered a high net worth or high asset divorce. However, with the guidance of an experienced legal team and a little preparation, it is possible to navigate a high asset divorce smoothly.
How to Navigate a High Asset Divorce
According to Kris Balekian Hayes, managing partner at Balekian Hayes, PLLC, the following five simple steps can help couples achieve a fair high asset divorce settlement.
Step 1: Find a qualified attorney.
While any divorce case can be challenging, those involving high-value assets are more difficult to resolve fairly. Because there are more assets at play, high-net-worth divorces require a unique skill set from a legal team experienced in these cases. Without strong representation from an experienced divorce attorney, you could end up with a far smaller portion of the property than you deserve under the law. Many couples have a prenuptial or postnuptial agreement in place, in which they have decided ahead of time how to divide their community property. This can make things much easier during divorce, but sometimes a prenup or postnup can be disputed.
Step 2: Start by examining current assets that may be affected by a divorce.
List your assets as soon as possible. During divorce proceedings, it’s possible you could lose access to certain documents and records. Therefore, begin your preparation by making copies of all applicable paperwork. Additionally, you should also start thinking about whether the property is considered separate or marital property.
Step 3: Gather records and document items.
Begin gathering records for all jointly held accounts, properties, and assets. Documentation is essential to determine your fair share of assets and can help prevent your spouse from hiding any assets. It is necessary to make copies of all tax returns, loan applications, wills, trusts, financial statements, banking information, brokerage statements, loan documents, credit card statements, deeds to real property, car registrations, insurance inventories, and insurance policies. Don’t forget to make copies of records that can also trace and verify your separate property, such as an inheritance or family gifts.
Create an inventory of household goods and their value, including household electronics like TVs, computers, and big items like your furniture. Values can be documented with receipts to show how much was paid for an item or by an appraiser.
Step 4: Budget accordingly and spend wisely.
High-asset divorces can be more costly. With more assets to divide equally, it may take longer than a typical divorce and result in increased legal fees. Additionally, your attorney may need to use a forensic accountant, which adds additional costs. During the divorce process, it’s essential to spend money wisely. Those going through a divorce may assume that higher spending levels will garner them a larger divorce settlement. Many people may believe that if you spend more, the higher your needs will appear in court, and the more money you will get. However, the court may view unnecessary high spending as lavish wasting of assets and can count negatively on you. It is best to regulate your spending until the divorce proceedings are final.
Step 5: Be patient.
Often, high net worth divorces may take longer than a divorce where fewer assets are involved. In many cases, people undergoing a high-net-worth divorce will often stop negotiating in the hopes of settling sooner, but this typically will not work out in their favor. Splitting up a high-net-worth marriage is like breaking up a large company. The process will take time, and the best course of action is to have patience in the process. The average high asset divorce could take around five to six months, but it can take longer if additional financial matters need to be addressed.
The best way to get guidance on your specific legal issue is to contact a lawyer.