When couples initiate a divorce, one of the most significant obstacles is asset division. This becomes accentuated in high-net-worth divorces, where substantial wealth, property, and other assets create additional legal obstacles couples must overcome to protect their best interests, both personally and professionally.
In the absence of an experienced family law attorney, even divorces that appear straightforward can become complex legal battles. Couples with high-net-worth estates must first consider the basic elements to properly prepare for the arduous process ahead, starting with this guide on the division of high-net-worth assets in Maryland divorces.
What is a High-Net-Worth Divorce?
A high net worth individual often refers to those with a minimum liquid asset value of $1 million. This can also apply to marital estates, but with more stipulations. In a marriage ending in divorce, there must be a fair value assessment of these assets, all of which are not liquid; couples may share bank accounts, pension funds, properties, and more.
For general accounting purposes, high-net-worth estates usually see a total asset value of higher than a million dollars, with no upper ceiling. Examples of assets that could be subject to division in a high-net-worth divorce include:
- Personal and work-sponsored retirement accounts
- Investment portfolios
- Real estate holdings, including investment and rental properties
- Asset protection trusts
- Business interests
- Luxury vehicles
- Art collections
Many of these assets have a complex ownership status or are located overseas. This further complicates the process of asset division in high-net-worth divorces.
What Property is Divisible in a Divorce?
There are two types of assets – marital property and non-marital property – and high-net-worth couples must understand the difference before initiating their divorce process. If couples can agree on a fair distribution of assets, the court may not intervene.
However, in cases of disagreements, the marital property is valued and divided according to equitable distribution, a statute described in Maryland’s Marital Property Act. Under this statute, the court will determine an equitable division of marital property based on the circumstances, including the circumstances of ownership for each asset. This is contrary to community property statutes, by which marital assets are divided equally.
For example, an art collection that was explicitly gifted to one spouse will likely be deemed non-marital property, which excludes it from asset division. This also usually applies to assets obtained before the marriage.
However, a residence that was purchased during the marriage will likely be considered marital property and divided equitably. Significantly, the amount that one spouse paid for the property or the name on the title will not usually exclude the other spouse from their share of the asset’s value.
How Does the Court Determine Asset Division?
Categorizing marital vs non-marital property is merely the first step in the complex process of asset division in high-net-worth divorces in Maryland. The court must also determine which proportion of assets is “equitable” in the current circumstances.
Once it has been established which assets are divisible, the court typically orders value appraisals, especially when businesses, high-value properties, or collections are involved.
These complex assets often make it impossible for couples to resolve high-net-worth divorces without legal intervention, which is why retaining experienced valuation experts remains a vital step in the process. Retaining an attorney experienced in high net worth divorces can often include access to premier valuation experts.
Another common issue with high-net-worth cases is how prenuptial or postnuptial agreements impact the settlement. While these documents may provide clarity on the division of assets, one spouse may claim that they were forced to sign an unfair agreement and bring its validity into question.
Additionally, many couples have hidden income and personal assets they attempt to hide from their spouses to avoid asset division. In high-net-worth divorces, this is not only more common but also more feasible since offshore bank accounts, private storage facilities, and hidden properties are easier to procure.
Again, retaining an attorney experienced in these specialized divorce cases can include access to financial investigators, highly skilled at locating hidden assets.
Trust an Experienced Family Law Firm to Advocate Your Rights in High Asset Divorces
For over three decades, the experienced team at Milstein Siegel has helped our clients strategically navigate the intricate process of asset division. We recognize the obstacles inherent in high-net-worth divorces and advocate for our clients’ best interests at each stage of the process with expert asset valuation and negotiation skills.
Contact us today to learn how we help couples resolve their asset division settlements, especially in cases involving high-net-worth assets.
