Even the most amicable divorces can be complicated, and when the divorcing couple has a high net worth, the proceedings can be particularly stressful. In addition to the typical concerns of divorcing couples, such as child custody and ownership of the primary residence, there are often significant assets at stake, and this may include business ownership and substantial investments.
We’ve put together key things to consider if you are involved in a high net worth divorce checklist.
Gather Useful Documents
You may be asked to gather important documents that show a full picture of your finances. Your attorney may advise you on which specific documentation is needed, but it is a good idea to bring as much information as possible to your first meeting. Some of the documents include:
- Prenuptial agreements
- Bank statements
- Income tax returns for the past 3 to 5 years
- Business tax returns for the past 3 to 5 years
- Statements for pensions, IRAs, retirement accounts and 401Ks
- Proof of income for both spouses
- Copies of documents pertaining to debts, loans and mortgages
- Life insurance policies
- Paperwork related to all assets
- Documents related to special expenses, such as aging parents, pet care or children with special needs
Make an Inventory of your Assets
In a high net worth divorce, there are often considerable assets at stake that extend far beyond the typical assets of couples at other financial levels. Your attorney may ask you to create an inventory of your assets.
List everything that you own and make a note of whether you or your spouse owned it before the marriage or acquired it after you were married. You also may need to note whether those assets acquired after the marriage was a gift or received through inheritance.
Assets that should appear on you high net work divorce checklist include:
- Your primary residence
- Vacation homes
- Other real estate and investment properties
- Vehicles
- Boats and trailers
- Airplanes
- Non-retirement assets
- Digital assets, such as NFTs and cryptocurrency
- Intellectual property assets, such as patents and trademarks
- Retirement investments
- Expensive household items, such as designer clothing and jewelry
- Collections, such as artwork, instruments, firearms, antiques and coins
- Business ownership
- Cash on hand
- Stocks, bonds and mutual funds
- Hedge funds
- Royalties
It is important to be as thorough and forthcoming with this list as possible. Some high net worth individuals may be tempted to hide assets from the other spouse in hopes of retaining them after the divorce. This is particularly common when the primary earner controls the finances and the other spouse is unaware of the full extent of marital assets.
However, in a high net worth divorce, your spouse’s attorney will likely be able to uncover these assets by working with forensic accountants and private investigators. You could face serious economic and legal consequences if you are caught attempting to mislead the court. Working with an experienced divorce attorney can help you to protect your assets without resorting to illegal tactics.
Parenting Issues
If you and your spouse have children, you should make a list of all the parenting issues that will need to be discussed with your attorney. One major matter that needs to be decided is custody.
There are two types of custody to consider: legal custody and physical custody.
- Legal custody – This involves the right to make long-term decisions about a child’s religious training, education, medical care and other major life matters.
- Physical custody – This involves spending time with children and making decisions regarding their daily needs, including where they live.
Consider if you will be pursuing sole or joint custody; you or your spouse may be granted sole physical custody, sole legal custody, or both. You may also be granted joint custody. Joint legal custody entails working together with the other parent to share care and decisions regarding your children’s upbringing, even if the children ultimately have just one primary residence. With shared physical custody, the child will have two residences and will spend a set minimum with each parent.
Some other parenting issues to consider:
- Which parent covers health insurance
- Which parent will pay child support, and how much will it be
- If there is a history of domestic violence or child abuse that could influence custody decisions
- School tuition
Update your Estate Planning Documents
Once your divorce is final, you may need to update estate planning and documents such as:
Will- Living trusts
- Medical and durable power of attorney
- Executor of your estate
Some divorce agreements may require you to name a specific primary beneficiary for certain assets that were acquired during your marriage, such as naming your minor children as beneficiaries of your retirement accounts.
Contact the High Asset Divorce Attorneys
There are many important considerations when going through a high net worth divorce, and one of the best decisions you can make is to work with experienced legal counsel. At Milstein Siegel, our team can guide you through all aspects of your high asset divorce in Maryland and will help guide you with professional insights on your case. Contact us today to request a consultation.
