By their very nature, most divorces are contentious, but when significant wealth and infidelity are involved, conflicts can escalate quickly. Infidelity introduces not only heightened emotions but also the need for strategic considerations in high-net-worth divorce cases.
While Maryland follows a principle of equitable distribution, the influence of marital misconduct is far from straightforward. In some instances, infidelity may impact the financial outcome, particularly when it involves financial misconduct or the dissipation of marital funds.
Many people are unaware of how infidelity truly affects the division of assets in a divorce. Keep reading to discover the legal principles behind asset division in high-net-worth divorces, the challenges infidelity can create, and the steps you can take to protect your financial future.
What Is a High Asset Divorce?
A high-asset divorce involves substantial marital property: real estate, investments, businesses, and retirement accounts. In Maryland, courts use equitable distribution to divide marital assets. This does not mean an equal split; instead, the goal of the court is a fair division of assets and liabilities based on various factors.
Unlike some states, Maryland focuses on fairness and the financial contributions of the spouses rather than marital misconduct. Although Maryland law does not use infidelity as a punitive factor in the division of assets, it may still be a determining factor in the process.
How Infidelity Affects High Asset Divorces in Maryland
Infidelity may still influence the division of assets if it has affected the financial health of the marital estate. For example, if a spouse spent marital funds on an affair through luxury gifts, trips, or hidden accounts, the court may take these expenditures into account when determining the final settlement. Here is what you need to keep in mind:
Dissipation of Marital Assets
Dissipation of assets occurs when a spouse wastes, squanders, or gives away marital assets, decreasing the marital estate. If one spouse drained joint accounts to fund an affair the court may adjust the division of assets to account for the loss.
Spousal Support (Alimony)
While Maryland courts base spousal support on factors such as income, earning capacity, and financial need, they may also consider circumstances such as infidelity. If the affair caused significant issues or financial instability, it could impact the court’s decisions regarding alimony.
Child Custody
Although custody is not a direct part of asset division, infidelity can factor in here as well. While infidelity usually is not enough to sway custody decisions, it can come into play if a parent’s affair exposes the child to unsafe, unstable, or inappropriate situations, causes a parent to neglect their child’s needs, or causes significant emotional turmoil for the child.
Challenges in High Asset Divorce Involving Infidelity
High-asset divorces are typically complicated, but infidelity can add even more layers of difficulty. Here are some of the most common challenges:
Managing Emotional Tensions
Infidelity often intensifies emotions, making settlement negotiations more contentious. A betrayed spouse may resist compromise, prolonging disputes and increasing legal costs.
High net worth individuals have public images or business positions that require discretion; however, the high level of emotions may threaten those situations. An experienced attorney can be invaluable for mitigating emotional situations and focusing on strategic decisions that protect their clients’ financial interests.
Protecting Business Interests
If one or more businesses are part of the marital estate, it is essential to ensure accurate valuations. If you suspect hidden assets or undervaluation, a business valuation expert will provide clarity and ensure fairness which forms the foundation of asset division and a financial forensic analyst to locate all assets.
Attorneys experienced in high asset divorces understand the value of having the appropriate resources for this and similar processes and often have established working relationships with the leading professionals.
Proving the Impact of the Infidelity
Proving the impact of infidelity requires evidence tying the infidelity to financial misconduct. Likewise, testimony from teachers, counselors, or other third parties can demonstrate the effects on a child. An attorney experienced in high net worth cases involving infidelity will outline what constitutes impactful evidence and actionable steps for collection of the evidence.
Actionable Steps for Addressing Infidelity in High Asset Divorces
If infidelity is part of your high-asset divorce, these steps will help you protect your financial future:
Work with an Experienced Divorce Attorney
A seasoned high-asset divorce attorney in Maryland will help handle asset dissipation issues and guide you toward long-term financial stability.
Gather Evidence
Collect bank statements, credit card bills, and receipts to prove dissipation of assets. Also, gather evidence demonstrating the negative impact on your child, or your spouse’s ability to parent effectively.
Rely on Financial Experts
Forensic accountants can uncover hidden accounts or track questionable spending, ensuring transparency in the division of assets. Have all businesses valuated by a business valuation expert.
Prepare for Mediation or Court
While mediation has helped resolve many divorces, high net worth cases involving infidelity often require court intervention. Your attorney will help you build the best case for your situation.
Focus on the Future
Divorce is emotionally draining, but staying focused on your long-term goals is essential. Work with your attorney and financial advisors to build a clear post-divorce plan.
Contact Milstein Siegel for Skilled Guidance Through a High-Net-Worth and Infidelity Divorce
High net-worth divorces involving infidelity require careful planning and skilled guidance to address heightened emotional tensions and potential financial misconduct. By correctly documenting evidence, working with an experienced Maryland divorce attorney, and focusing on your long-term goals, you can protect your financial interests and achieve the best possible outcome for your situation.
If you are facing a high net worth divorce in Maryland, do not go it alone. The legal team at Milstein Siegel is experienced with the challenges involved in high-asset divorces. Contact Milstein Siegel today to request a consultation and secure your financial future.
