A Guide to High Net Worth Divorce

Hands of wife and husband signing divorce documents or premarital agreement at the lawyer's office. High net worth divorce concept.

If you or your spouse have substantial assets and you’re considering parting ways, there are several important considerations. Although a high net worth divorce follows the same process as any other divorce action, these matters can be more complex. In addition, such cases can also be much more contentious, especially when it comes to resolving issues such as property division or spousal support and alimony.

What is a High Net Worth Divorce?

High net worth divorce refers to a divorce proceeding in which couples have more assets than those in a standard divorce. While there is no legal definition for high net worth divorce, the term traditionally applied to divorces involving more than one million dollars in assets. These assets are usually the kind that are difficult to place a value on, such as stocks, bonds, real property, pensions, business interests, and international property holdings. Notably, these types of divorces generally involve complicated asset issues and nuanced property division matters requiring skill and knowledge to resolve favorably.

Common Issues in a High Net Worth Divorce

Due to the amount of assets and property involved, high net worth divorces are often much more complex than other divorce matters. For example, they may involve international issues if a spouse owns assets in a foreign country or has offshore accounts. In some cases, forensic accounting may be necessary to uncover hidden assets if a spouse is wrongfully concealing them.

Other common issues can include the following:

  • Division of assets — High net worth couples may acquire a significant amount of assets and property during the course of their marriage. In cases where substantial assets are involved, spouses may own multiple pieces of real estate, artwork, jewelry, vehicles, and other high-value property. Pennsylvania applies the doctrine of equitable distribution in divorce. This means that marital property would be divided in a way deemed fair (not necessarily equal).
  • Commingling of assets — It can be difficult in a high net worth divorce case to identify separate property versus marital property. It’s also not uncommon for these types of property to be commingled. For instance, while an inheritance would typically be considered separate property, an exception may be made if it has been commingled with joint assets unless it has been safeguarded with a prenuptial agreement.
  • Determining spousal support and alimony — Sometimes in a high net worth divorce, one spouse is the primary earner, and the other spouse contributes to the marriage in non-financial ways. While spousal support and alimony are not automatically awarded in Pennsylvania, it may apply if one spouse was financially dependent upon the other during the course of the marriage.
  • Child support — Under the Pennsylvania child support guidelines, high-income cases are defined as those in which the parents’ combined income is greater than $30,000 each month. In such matters, the court follows a formula that requires the parties to pay the highest basic support obligation per the number of children, in addition to a percentage of the amount exceeding $30,000.
  • Complex valuations — In a high net worth divorce, experts may be required to determine the value of things like business interests, collections, real estate, investments, intellectual property, retirement accounts, or other complex assets.
  • Business interests — If spouses jointly own a business, they may face the issue of whether to continue operations, sell the company, or proceed with a buyout. It’s vital for the business to be properly valued in order for the spouses to enter into a fair settlement.

All property and assets owned jointly or separately by either spouse must be disclosed in a divorce proceeding. Concealing, disposing, or hiding assets is illegal and can result in serious consequences. The ramifications of hiding assets can range from having to pay the other spouse’s attorney’s fees to criminal charges in the most severe cases.

How Do Prenuptial and Postnuptial Agreements Impact a High Net Worth Divorce?

In the event a valid prenuptial agreement was signed before the marriage or a postnuptial agreement was entered into during the marriage, the document would control how the above issues would be decided. But even in cases where the couple has a prenup or postnup to reduce financial complications, they may not have fully anticipated the amount of assets they came to acquire. Accordingly, negotiation or litigation may still be necessary to resolve these issues.

One of the key elements in whether a prenup or postnup is enforceable is full financial disclosure. As long as each party disclosed their assets to the other and there was no duress, these agreements will usually stand. However, if a spouse is not truthful about the extent of their assets or wrongfully pressured the other into signing, a prenup or postnup may be challenged. If such a contest is successful, the divorce would proceed as if no such agreement had ever been entered into.

Contact an Experienced Pennsylvania Divorce Attorney

High net worth divorce is complex and requires the representation of an attorney who has extensive experience handling such matters. Berman & Associates offers knowledgeable counsel and high-quality advocacy for those facing divorce in Pennsylvania. Providing personalized time and attention in every case, we are committed to advising our clients regarding the best course of action. Located in Media, Pennsylvania, we serve clients in Delaware, Chester, and Montgomery Counties, as well as in the City of Philadelphia. We welcome you to contact us to schedule a consultation.

Categories: Divorce