Why High Net Worth Divorces Are More Complicated
Families with substantial means often face problems unique to their station in life. Managing the family’s lifestyle and financial portfolio can be difficult. When these relationships end, the resulting high net worth divorces are more complicated for many of the same reasons. At Berman & Associates, we can help you navigate, negotiate, and litigate your high-income divorce to set you up for success in the future.
High-Asset Divorces Include Different Types of Property
The more assets your family has accumulated during your marriage, the more complicated your high net worth divorce will likely be. However, this isn’t simply a matter of quantity. High-asset divorces often include different types of property that present challenges both in setting an appropriate value and in finding an equitable distribution between you and your spouse. These assets might include:
- Business interests and corporate stocks
- Investment portfolios
- Inheritances and trust interests
- Pension plans and retirement assets
- Timeshares and real estate investments
At Berman & Associates, we approach these assets systematically. We will work with your family’s accountant, financial advisor, and business shareholders to properly identify your assets and consider the tax and financial implications of any proposed property division. If you and your spouse own a family business or have corporate stock options, we will work with business valuation experts to set an appropriate value on what you own.
Keeping Non-Marital Inheritances in the Family
Many families’ wealth is passed down from one generation to the next. If you have benefited from your family’s wealth, that family may have a vested interest in shielding those assets from an angry spouse. If you inherited assets from your family prior to the marriage, or have kept those assets separate from your household’s holdings, the high net worth divorce attorneys at Berman & Associates can help you to trace those assets, identifying them as non-marital property, and shielding them from your spouse’s claims.
Shielding Assets Through Prenuptial or Post-Nuptial Agreements
When one or both spouses have accumulated assets or anticipate inheriting substantial wealth before their marriage, they will often enter into a prenuptial or postnuptial agreement to control how those assets are treated in the event of divorce. These contracts can be used to plan how the family’s financial needs will be met, direct how property will be obtained or sold, and exclude specific assets from the marital property to be divided in the event of divorce. Both pre- and post-nuptial agreements are enforceable in Pennsylvania. However, a prenuptial agreement (signed prior to the marriage) offers both parties more protection.
When a high-asset marriage ends, enforcement of the spouses’ premarital and post-nuptial agreements are often a key aspect of the divorce process. At Berman & Associates, we can help you interpret the contracts you signed leading up to or during the marriage and advocate for their enforcement or unenforceable status, depending on the language in the contract and your financial position.
Alimony and Spousal Support for Affluent Spouses
Pennsylvania law allows a dependent spouse to receive alimony or spousal support according to a formula designed to equalize the money available to both sides in the high net worth divorce. In high-income cases, this can result in a substantial monthly payment. However, there are factors to be considered in determining whether alimony is paid, the amount, and its duration. In particular, setting an affluent spouse’s income is often up for debate or negotiation, and can include:
- Salary
- Bonuses
- Company in-kind compensation (i.e. cars and cell phones)
- Business income
- Partnership distributions
- Property rentals
- Royalties
- Dividends
- Annuities
- Interest on investment portfolios
At Berman & Associates, we have extensive experience in alimony issues. We will evaluate both parties’ income -- from whatever sources -- along with other relevant factors, to allow you to make an informed decision regarding the payment of alimony and spousal support.
Child Support Works Differently for High-Income Families
When children are involved in high-income divorce situations, the question often becomes how much child support is enough. If left unchecked, the child support paid by high-income parents can quickly exceed any child’s needs. Pennsylvania’s child support formula only applies up to a combined monthly income of $30,000 (or $360,000 per year). For high-income families, there is a separate three-step process to determine the appropriate child support award:
- Apply the formula based on the family’s monthly income and number of children
- Adjust the formula for shared custody and allocate additional child-related expenses
- Deviate from the formula where appropriate based on several factors including the children’s needs, the spousal support awarded to the caregiver spouse, and the family’s standard of living.
This process is far more complicated for lower-income families, and requires an advocate to establish the children’s lifestyle and needs. We can help you understand the Pennsylvania Child Support Formula and determine if deviation is appropriate for your high-income family.
Protecting Your Privacy During a High-End Divorce
Wealth often brings publicity. If you are among the class of people who attract a local or even national media following, a divorce can bring unwanted attention to you and your family. Divorce is always deeply personal. At Berman & Associates, we understand the need to keep your family affairs confidential. We can assist you through private mediation or by entering an arbitration agreement that will keep your high net worth divorce out of open court. When a settlement is reached, we will ensure that it includes the necessary confidentiality provisions to protect you and your children from unwanted attention as you move into the next phase of your lives.
At Berman Law, we understand that divorce must be treated differently among wealthy families. Our experienced Pennsylvania family law attorneys have handled a variety of high-asset divorces, and we’re confident we can find a solution that will work for you. We welcome you to contact us to set up an interview to discuss your financial situation and your divorce, so that you can be comfortable working with someone with the knowledge and experience to handle even the most complicated family circumstances.
