Can Divorce Be Simple Even With a High Net Worth?
September 16, 2020
Spouses with a high net worth or high income must often face a much more complex divorce than those with few assets to divide up. But just because you have more financial assets, does that automatically mean that you should dread a complex, 'messy', or ugly divorce? Not necessarily.
As with all matters related to divorce, each case is unique. But even a wealthy couple who appears fated for a complicated divorce may find it doesn't have to be. Here are six ways it can be relatively painless.
1. When There Was a Prenup
Prenuptial agreements are designed to do the work of a divorce agreement ahead of time. Both spouses would have agreed to certain conditions before getting married. Because prenups are usually drawn up to deal with financial matters — including what each spouse brought into the marriage and what they agree to take from it — they're one of the best ways to make a high-income divorce simple.
2. When Assets Are Liquid
High net-worth families often have assets in many different forms, which complicates their division. This could include multiple real estate properties, business ventures, investments in numerous institutions, or assets outside the United States. Many of these types of assets are difficult to divide up without selling, buying out the other party, or operating it together.
A couple whose assets are mostly liquid, though, may find property division relatively easy. If your assets are generally held in financial accounts that can be readily divided and liquidated, this part of the process can go smoothly.
3. When Debts Are Minimized
The other aspect of property division is dividing your debts. Debts — ranging from jumbo mortgages to highly-leveraged businesses — can be as complex to work with as non-liquid assets. These reduce the couple's net worth and must be paid by someone, which usually leads to further disagreement and negotiation.
If possible, you can make your divorce less complex by minimizing such debts before dividing your assets. Get rid of potential sticking points like credit card debt, business debt, and unnecessary loans to make your asset division much easier.
4. When There Is Alternative Dispute Resolution
Alternative dispute resolution helps keep your divorce out of the court system. The most common form, mediation, involves a professional who sits down with all parties and helps them find compromises to satisfy both sides. This can be done to hammer out just one issue — like support — or for many parts of the process.
During dispute resolution, outside experts, including lawyers or accountants, can provide useful information that will lead to financial solutions for high net worth divorces.
5. When Support Isn't an Issue
Ongoing financial support can be one of the biggest areas of contention among high earning households. When one partner earns much more than the other, the disparity is usually compensated through alimony — which requires negotiation.
You may not need to deal with alimony, though, if both partners are fairly evenly matched in earning power or can be compensated in one-time assets. And because child support is usually based on state guidelines, this aspect of divorce, too, doesn't necessarily need to cause complications if both parties agree to abide by these models.
6. When Assets Weren't Co-Mingled
Property division only involves marital property — not necessarily everything both spouses own. During a divorce, certain assets — such as an inheritance or money from the sale of an old home — that were the property of a partner before the marriage may have been kept strictly separate from marital property. This limits the amount and scope of financial negotiation.
Does your divorce fall into any of these categories? More than one? If so, you may be in for a pleasant surprise as you prep for divorce. The best way to find out what you can expect from your particular case is to meet with an experienced family law attorney as early as possible. Make an appointment with Budget Divorce Center
today to see how simple we can make your divorce proceedings, so you can move forward faster.
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