People with a high net worth who are facing a divorce should proceed with caution. Individuals in this situation often face specific challenges that require assistance from an attorney with experience handling cases of this nature.
Here are three common challenges regarding high-asset divorces. Awareness of these challenges can help couples to better understand a few of the major issues at stake as they evaluate how to move forward.
1. Hidden assets
One way that a high earner may attempt to maintain assets without equitably dividing them in the divorce is by actively taking steps to hide the assets. A study conducted on behalf of the National Endowment for Financial Education revealed that one in three adults admitted they have committed “financial infidelity” against a current or past partner. Financial infidelity includes hiding purchases or bank accounts. When emotions run high during a divorce and the situation becomes contentious, deception about finances can be one way a spouse attempts to keep assets that are subject to equitable division.
2. Shared business
Sometimes high net worth married couples also share a business. This makes the divorce complicated on various levels because the couple’s finances are directly tied to their shared livelihood. A major question becomes how to divide the business equity or if one spouse will buy out the other spouse’s share of the business. For that to happen, a valuation of the business must also take place, which is a complex matter in and of itself.
3. Equitable division of property
Wisconsin divorces come under the principle of equitable division of property. Equitable division does not mean dividing property by half, but rather, dividing by what the judge believes is fair and equitable. There are numerous criteria for determining what is fair, and the process begins with classifying marital property from nonmarital property.
These are just three challenges that particularly impact high-asset divorces, but there are many others. The complexity of these challenges requires the skill of an experienced family law attorney who knows how to handle divorce cases where high net worth is a factor.