Archive for the ‘High Net Worth Divorce’ Category

2 Common Financial Myths About Getting Divorced

Monday, March 5th, 2018

When couples get divorced, one of the first thing that they do with their attorney is discuss what they want in the division, and spouses begin to strategize (on their own) how to get what they want. Part of that “strategizing” is often misguided by some inconsistent myths about divorce, division of property, and what each spouse is entitled to.

Myth #1: Any money you deposit into your account during and before the marriage is yours!

Although I am not insinuating that spouses are always preparing for divorce during the marriage, if you examine common behavior, it might look a bit differently. For instance, many individuals believe that if they keep a separate bank account during the marriage, then, in the case of divorce, their soon-to-be ex will not be entitled to any of those assets. However, depending on where this money came from, it could be argued otherwise – even if the account is in your name. Marital funds, as they are called, is income or money acquired during the marriage (a very encompassing term). Therefore, any funds you deposit into that separate account during the marriage can be deemed as marital property, and therefore, your spouse has some claim of interest in it. So unless you are very scrupulous about how you separate your money, don’t be so sure that your separate bank account is only yours.

Myth #2: If I paid for the house, it doesn’t matter whose name is on the deed! And in a divorce, I keep either the house or the payment if it is sold!

With regards to the division of property, it is again influenced by certain factors. For instance, if you previously owned the property solely, and your name is the only one on it during the duration of the marriage and during the divorce, then you have a really good probability of retaining the home. However, if you re-titled the property so that now, your spouse is listed as a co-owner, the court will find the house to be marital property.

In addition, any funds you spend on the home during the marriage (remember that these are now marital funds) can lead to an increase in the value of the property, in which case this increased value gives the non-owning spouse a vested interest in the property. In short, whose name is on the deed has a strong chance of retaining the property, but how the property was maintained and used can come into play as well.

Divorce cases which involve distribution or division of numerous and substantial assets require special skills and expertise to ensure proper valuation and accounting. Contact Paul E Rudder, Esq. today for expert legal advice. Call 212-826-9900 to set up an appointment.

Should You Mediate Or Litigate Your High Net Worth Divorce?

Sunday, June 25th, 2017

You are thinking of getting divorced and you and your spouse are considered high net worth individuals, should you mediate or litigate your divorce? Although mediation is often more attractive than litigation due to the fact that it can save a lot of time, emotional energy and of course, money, it also requires a semi-functional relationship between the spouses in order to even be able to mediate. In addition, most high net worth divorces often are riddled with complicated assets, which are very difficult to solve in mediation.

Because of how much money is often at stake, each party wants to come away with the greatest amount, and limit the number of assets that are divided. However, regardless of whether you are the high net worth party or the spouse, there is legal entitlement on both sides to all marital assets. Maintaining the lived lifestyle prior to divorce will also be considered.

Mediation, even if it doesn’t result in a final divorce settlement and judgment, it can at least get you a legal separation, and moreover, it isn’t as emotionally taxing as litigation and keeps more of the decision-making power between the parties as opposed to litigating in court.

Ultimately, litigating is the more sensible option when the marriage has gotten to such an irreconcilable place that working together in mediation is unlikely to result in positive results if any. Also, consider the complexity of the assets, and if they can be decided fairly and accurately in mediation.

If you need a divorce attorney who has the experience in handling high net worth divorces, call 212-826-9900 to set up an appointment with Paul E Rudder, Esq., a top-rated divorce attorney in NYC. Call today!

What Is A High Net Worth Divorce?

Monday, June 5th, 2017

In order to understand what a high net-worth divorce is, it’s important to first understand what “high net-worth” is classified as. A high-net-worth individual is someone whose net-worth either exceeds $1 million or has an income that is over $200,000 over the last two years. A high net worth divorce is when the joint net worth of the two parties exceeds $1 million, or the joint income between the two spouses is over $300,000 over two years.

To start, please know that the title of “high net worth divorce” does not come with different rules or laws, nor will the court act any differently within the threshold of the family court system and NY State family law. The term is mainly used when the spouses are relatively wealthy. Although divorce law remains the same regardless of your net-worth, the attorney you hire should be one that is accustomed to and has experience representing people who have similar socio-economic backgrounds.

Not all divorce attorneys have the experience with litigating over large estates and assets, and these both make cases much more complex and complicated. Even fewer attorneys know how to handle things like overseas assets and licenses, so it is imperative that the attorney you hire can properly and efficiently represent you and your interests. Because litigation over all these assets can go on for so long, it is often advised that the spouses try to work out the separation outside of the court room. Of course, this is not always a possibility, and you will need to consult financial specialists and mediators/attorneys at some point, but it can help avoid a lengthy, and expensive, litigation process in court.

If you need a divorce attorney to handle your high net worth divorce, contact Paul E Rudder, Esq. today at 212-826-9900 or fill out our contact form here.

Do Higher Net Worth Divorces Receive Higher Tax Consequences In New York?

Monday, October 26th, 2015

Divorce in general is a long, difficult, and complex procedure in almost every case. When there is more money, more assets and additional property included, it only makes things more complicated. Because of the fact that there is substantially more money involved, key divorce topics like spousal and child support and distribution of assets are all affected.

The court will look into assets such as:

– Business trips

– Real estate and other property

– Bank account(s)

– Stocks that a spouse may have in a portfolio

– 401k and other retirement accounts

– Trust funds that one or both of the spouses may have in entitled to them

Because property is being distributed and divided, and since you may have assets in your name, it is highly likely that there will be a change in your yearly taxes. You should consult a lawyer as opposed to an accountant, because they may not be as familiar with the legality as an attorney would be.

If you and your former spouse filed a joint tax return while you were married, you will now have to change your filing status as you are no longer together. In addition, when child custody has been finalized, you and your former spouse must decide who will get the tax exemption for the minor. If you and your spouse cannot come to an agreement, factors such as who has custody and the accumulated duration of time that each parent spends with the child can be used to decide which party can claim the tax exemption.

With regard to a high net worth divorce, there is an accepted notion that it is fairly common for one of the parents to earn a considerably higher income. When this is the case, the lower-income earning spouse will often ask for alimony, otherwise known as spousal support. They may argue that they have grown accustomed to a certain lifestyle, or that they cannot live off the income they earn (if they even have a job). If alimony is awarded, tax laws apply here as well. The parent who has to pay the alimony can claim the ordered amount as a deduction on their tax return. Moreover, the receiver of the alimony must report this support as part of their income on the tax forms.

Beyond alimony, there are other sources of income that may come into play during the divorce proceeding. If you sell the marital home or property that had been jointly owned during the marriage, there are capital gains taxes that must be reported. If you withdraw from a retirement fund earlier than agreed upon with your bank, there are tax penalties for that as well. Lastly, if you have any stocks, bonds, or any other types of investments that were shared assets, and you sold them, you have to claim that as income as well on your tax returns. Although these seem like routine parts of divorce, it is imperative to remember that any and all bases of income are reported for tax purposes.