When a divorce happens, it can come with an incredibly difficult process to go through for a number of different reasons. While no two divorces are the same, for individuals with a high net worth, there are certain important aspects to consider. Everything from ownership of high-value property to determining child or spousal support should be approached in a manner that effectively protects wealthy spouses’ important financial assets.
What to Consider in a High Net Worth Divorce
In addition to their newsworthiness, high net worth divorces can also be incredibly cumbersome. This is because they require an experienced divorce lawyer to understand the significant financial impacts on high-value investments, properties, assets, business dealings, and much more. Some of the various different items that must be taken into account in a high net worth divorce include:
Prenuptial and Postnuptial Agreements
Prior to filing for divorce, spouses can use any existing prenuptial or postnuptial agreements to reduce financial complications during separation. A prenuptial agreement is designed to protect assets while ensuring both spouses are financially secure, as well as protecting children’s assets in the event a spouse enters a second or third marriage.
In Texas, prenuptial agreements cover a wide range of different issues, including property rights and obligations, who controls property, allocating property in the event of death, the right to alimony, and many other elements. In order for a prenuptial agreement to be valid and enforceable in Texas, it must meet the requirements detailed in the Uniform Premarital Agreement Act (UPAA).
It is extremely important to ensure a prenuptial agreement is entered into voluntarily. Should the court finds one party did not understand the document, was forced into signing it, or that the agreement is unconscionable, it can void the prenuptial agreement as unenforceable. When it comes to high net worth marriages, it is essential that spouses take steps to show a mutual understanding of the prenuptial agreement as well as the financial implications.
A Complete List of Assets
In any divorce, it’s important to have a compiled list of assets. Having an inventory like this already prepared (and kept up-to-date) in a high net worth divorce can help establish ownership as well as what could potentially be divided. Texas is a community property state – meaning most property acquired during marriage (aside from a few exceptions) is jointly owned and should be distributed in a “just and right” manner in a divorce. Those attempting to hide assets from a spouse should reconsider, as discovering fraud like this could weigh heavily against them during property division, as well as have potential legal consequences both in family court proceedings and even in criminal court.
Hiring a Forensic Accountant
Parties involved in high net worth divorces may have a jointly owned business, a family business, or a closely held business. If this is the case, a business valuation expert, as well as a forensic accountant, will likely need to audit these assets. This will include a close review of income tax returns as well as discovery regarding all assets. Automobiles, electronics, and other valuable items involved in business operations will also need to be adequately assessed.
Alimony and Spousal Support
Alimony is important to consider in a high net worth divorce, especially when one spouse is dependent on the other. Texas spousal support (or alimony), is additional money separate from any property division or child support that one spouse pays to the other in order to support them. Unlike other states, Texas does not have mandatory alimony; however, when a divorce involves individuals with significant assets, it is very likely one or both sides might ask for spousal support.
In a high net worth divorce, a party may request temporary alimony during the pendency of a divorce. Long-term alimony could also arise, and it is typically left up to the court (or other trier of fact) to decide the duration, the amount, and manner of payment for any alimony awarded.
Brazoria County Divorce Attorneys
Going through a divorce can be an incredibly difficult time for those involved. High net worth divorces often involve more complex issues that should be handled with the care of an experienced divorce attorney. At Terry & Roberts, our divorce lawyers provide knowledgeable and aggressive representation to our clients. We help you protect your family, yourself, and your finances. If you are going through a high net worth divorce and need legal assistance, contact us today.