Navigating a high asset divorce can be complicated as there is much more at stake than the average divorce. From hidden assets to shared bank accounts, many difficult situations can arise when a large amount of money is involved in the divorce process.
High asset or high net worth divorces typically refer to divorces that include more than $1 million in liquid assets. These assets can take on many forms, such as real estate, business shares, stocks and other investments.
When going through a high asset divorce, there are several factors that spouses should keep in mind to help ensure a fair and satisfactory outcome.
Establishing Income And Assets
It is not unusual for married couples to hide certain aspects of their finances from one another. Some spouses may even go as far as to hide assets to prevent the other spouse from receiving them in the divorce. If this type of situation occurs, there are steps that a person can take to determine income and uncover hidden assets. Hiring a forensic accountant is an excellent way to get an in-depth look at all finances in the marriage. A forensic accountant can often obtain copies of tax returns, pay stubs, bank account statements, and similar documents needed for proof of income or assets.
Have an accountant carefully review the income sources and assets of the other spouse. Forensic accountants can usually spot issues like missing assets or discrepancies across accounts. An accountant can also look at other financial aspects of a high asset divorce, such as 401(k) accounts, retirement funds and pensions. Clients can benefit from professional guidance about tax issues and how best to mitigate costly tax burdens. Along with an experienced divorce attorney, a forensic accountant is an essential part of a high asset divorce team.
Understanding Property Division
Property division in a divorce differs in each state. In Maryland, assets are not always split equally. Maryland is an equitable distribution state, meaning the court will divide the property as fairly as possible, but not necessarily equally.
Marital property generally includes real property, such as land and homes and other types of property acquired by either or both spouses during the marriage. Most courts exclude property that one spouse acquired as a gift or inheritance from a third party. Any property that either spouse acquired before the marriage is considered separate property.
There may be cases when one spouse wastes marital property during the irreconcilable breakdown of the marriage. Dissipation is the legal term for waste and is frowned upon by the court. If the dissipation of assets involves a large sum of money, it could constitute fraud.
Depending on the unique aspects of the case, a Maryland court may provide one spouse with a monetary award, meaning one spouse is legally required to pay money to the other. This is generally done to create a fair distribution of property and assets.
Calculating Child And Spousal Support
Some of the most critical components of a high asset divorce relate to child support and spousal support. The amount of support that a spouse may receive will depend on a variety of factors, such as the standard of living during the marriage, the contributions of the supported spouse to the career or education of the supporting spouse, the ability of the supported spouse to find work, each spouse’s income, the age and overall health of each spouse, and the length of the marriage.
In Maryland, for spousal support to be awarded, one spouse must prove that he or she has a financial need and that the other spouse has the financial ability to pay. The possessions and estates of each spouse will also be taken into consideration.
The number of children and the custody arrangement between the parents will dictate which parent receives child support and how much. Child support is generally awarded if the custodian of the child or children cannot support themselves due to the child’s age or a medical condition that prevents the parent from working.
Speak With A High Asset Divorce Attorney
High asset divorces can be highly complex due to the sheer amount of money and property involved in these transactions. Without the proper legal counsel, it is easy to make costly mistakes that could affect a person’s finances for many years to come. Complex divorce cases involving many assets require diligent and aggressive representation to ensure that the client’s best interests are protected.
Milstein Siegel has provided clients in all areas of Maryland divorce and family legal services for more than 30 years. To discuss a high asset divorce case or to schedule a consultation with an experienced divorce attorney, reach out to the friendly and knowledgeable legal team at Milstein Siegel today.