Archive for August, 2019

Is My Divorce High Net Worth?

Friday, August 16th, 2019

The term ‘High Net Worth Divorce’ is thrown around a lot, especially in the news, as we see NYC’s elite finding themselves in the midst of messy divorces. But a high net worth divorce doesn’t only correlate to the “1%”. Typically, “high net worth divorce” referred to a divorce that involved more than one million dollars ($1,000,000+) in liquid assets (an asset that is cash in hand, or an asset that can be readily converted to cash). 

If you are considered a High Net Worth person, matching the qualifications above, you will likely have what is considered a High Net Worth Divorce. The real differentiating factors are, obviously, in the monetary realms, such as the distribution of assets (remember that New York is an equitable distribution state, meaning spouses in a divorce are recognized as having an equal interest in all marital property), alimony, and child support payments. 

NYC divorce lawyer Paul Eric Rudder, Esq. has a successful history representing high net-worth individuals, as we understand that a high-net-worth divorce will come with unique obstacles, which are directly correlated to the knowledge, valuation, and ultimate distribution of these valuable assets. We know that our clients have worked hard to accumulate this substantial wealth, and therefore have so much more to lose. High-net-worth individuals require an attorney with experience winning these types of cases, to reduce the risk of losing their hard-earned fortune, and relieving the stress of the process, as we quickly identify and protect these main asset targets: 

  • Ownership stakes in businesses
  • Inheritances
  • Retirement funds
  • Trusts
  • Bank accounts

An important thing to keep in mind is that not everything is subject to division, as New York State does recognize the difference between separate property and marital property (see our article on The Difference Between Separate and Marital Property). High net worth when there are children involved plays a role in deciding the amount of child support that will be awarded, as well as alimony, so it is important to be properly represented to ensure that the calculation for these awards is proper and fair. 

High Net Worth Divorce: How Does Divorce Change With High Net Worth?

Tuesday, August 13th, 2019

A startling statistic reveals that couples that hold a high net worth, either combined or through one of the spouses, are much more likely to see a divorce than their less (financially) fortunate counter-couples. Furthermore, there has been a staggering increase in the number of pre-nuptial agreements over the years, and a majority of these marriages that involve prenups are high net worth marriages.  This is not to say that a prenup is a pre-cursor to getting divorced, but it is an understandable shift to comprehend, that those with more assets and properties in their possession would institute a mechanism to protect them in the wake of a divorce.

Not only are there often more assets involved in a high net worth divorce, but the nature of these assets may also be complicated and not as liquid as a checking account. Business ownership, stocks and shares, these are sometimes included in a prenup – and sometimes they are not. Properties can be valuated and divided, but ownership of a business is much more complex, and can very often have a substantial impact on the future of that business.

A report by the Stanford Graduate School of Business revealed that divorce can impact the future of a company in the form of how it impacts the CEO, one of the parties in the divorce. It can influence their attitude toward business venture risks, it obviously impacts them on an emotional level and will pull their concentration from the progress of the business, and if the divorce decree requires selling or transferring of even a sliver of the business, the subsequent consequences could yield very tangible results.  

With so much to potentially lose, the mistakes we see in common divorces are amplified. Spouses will consider lying about their assets in order to protect them from being subjected to division via equitable distribution. Some, in an attempt to save their money or to just close this chapter of their life, will agree to a truly unfair divorce agreement, and the terms will be unfair in their former spouses’ favor! Emotions can easily get the better of you in this scenario, so it is vital to find a high-net-worth divorce attorney that can best understand what it is you have to potentially lose in your divorce, and how to best present your case so that these valuable, life-changing assets are not subject to division.