Divorce can be challenging for anyone, but the process of ending a marriage can be especially complicated for couples who have a high net worth. In addition to addressing the typical concerns about issues such as property division and child custody, determining how to resolve financial matters can take on a whole new level of complexity for couples with substantial assets. If you are going through a high net worth divorce in Illinois, it is crucial to work with an attorney who can help you understand the specific financial issues that may arise and how they could impact your future.
The Role of Asset Valuation
One significant challenge in high net worth divorces involves properly valuing all assets owned by a couple, both together and separately. This task can become particularly complex when there are diverse investment portfolios, business interests, real estate holdings, and other valuable assets involved. Accurate asset valuation is essential for ensuring an equitable distribution of marital property during the divorce proceedings.
To ensure that all assets will be valued correctly, it is important to consult with professionals such as forensic accountants and appraisers who have experience working with high net worth individuals. These experts can help determine the value of businesses, investments, retirement accounts, intellectual property rights, professional practices, and other valuable assets.
Business Interests
For high net worth individuals who own businesses or professional practices, a divorce can have significant implications on those interests. If both spouses are involved in a business enterprise, a divorce could potentially disrupt operations and divide ownership in ways that may negatively impact a business’s ability to operate successfully in the future.
In such cases, it is crucial to work with professionals who are experienced in handling complex business valuations and buyouts within the context of divorce proceedings. These experts can help determine the fair market value of a business, and they can develop strategies for dividing ownership or facilitating one spouse's buyout of the other's share of a company.
Complex Property Division Concerns
High net worth couples often accumulate substantial assets over time, ranging from real estate properties to investment portfolios, artwork, jewelry, luxury vehicles, and more. Dividing these assets fairly during a divorce requires thorough documentation and valuation of all assets. Appraisals may need to be performed for valuable collections or other items, and this can determine the current market values of assets and whether they have increased in value significantly since acquisition.
Couples may also need to determine whether certain forms of property are separate assets owned solely by one spouse or marital assets that will need to be divided during the divorce process. Prenuptial or postnuptial agreements may determine how ownership rights for certain types of property will be handled and how various assets will be divided during the divorce process.
Pension Plans and Retirement Accounts
If either spouse has retirement accounts in their name, is eligible for pension benefits upon retirement, or owns other assets that may be used to provide for their financial needs later in life, these assets will need to be addressed during the divorce process. Accurate valuation of these assets is crucial. Funds in retirement accounts may be divided between spouses, or one spouse may be able to receive a portion of the other spouse’s pension benefits. When dividing retirement assets, it will usually be necessary to use Qualified Domestic Relations Orders (QDROs), which will allow funds to be transferred or benefits to be allocated without incurring taxes or penalties.
Tax Implications of Property Division
Divorcing couples must also consider the taxes that may apply when dividing their assets and addressing other financial concerns. While assets can usually be transferred between divorcing spouses without incurring taxes, there are some situations where taxes may apply if certain forms of property are sold during the divorce process. High net worth couples can consult with financial professionals to ensure they understand the tax issues that may affect them, and they can take the proper steps to minimize their tax burdens and avoid future financial issues.
Alimony Considerations
In high net worth divorces where one spouse earns significantly more than the other or where a spouse has been out of work due to marriage-related reasons, spousal support can be an important consideration to address. This form of support can help ensure that a lower-earning spouse will be able to meet their needs during and after the divorce.
Determining whether alimony will be appropriate involves assessing factors like the income earned by both spouses, each party’s earning potential, the standard of living established during the marriage, the duration of the marriage, each spouse’s age and health conditions, contributions made by both parties to the marriage, contributions by one spouse toward the other’s education or career advancement, and the terms of prenuptial agreements. An experienced attorney can help ensure that all issues related to spousal support will be addressed correctly during a high net worth divorce.
Contact Our Experienced Kane County High Net Worth Divorce Lawyers
If you are going through a high-net-worth divorce in Illinois, it is essential to have knowledgeable and experienced legal representation. The St. Charles high asset divorce attorneys at Mirabella, Kincaid, Frederick & Mirabella, LLC work to help our clients navigate the unique financial challenges they may face during the divorce process. Contact us at 630-665-7300 to learn how we can help you address these issues and complete your divorce successfully.
Sources:
https://smartasset.com/financial-advisor/high-net-worth-divorce
https://www.eisneramper.com/forensic-accountant-divorce-1015/
https://www.forbes.com/sites/heatherlocus/2019/01/10/what-jeff-and-mackenzie-bezos-and-all-high-net-worth-couples-need-to-do-to-avoid-a-messy-divorce/
