Divorce settlements can be complicated, particularly for couples who have a high net worth and a number of marital assets. Determining equitable distribution and finalizing a divorce settlement involving wealthy couples may not be as streamlined as in typical divorces.
In this article, we will discuss how a high net worth divorce in Stuart, Florida differs from other divorces and how marital assets for wealthier couples are distributed in the State of Florida.
How is a High Net Worth Divorce Different?
1. Disputes
Because there is often more at stake in a high net worth divorce, the settlement is more likely to be contested. One spouse may be concerned that the other spouse is concealing assets and not disclosing true net worth. As a result, there could be concerns that assets have been undervalued and or are not being distributed fairly.
2. Time
Finalizing a high net worth divorce in Stuart, Florida typically takes more time than a typical divorce. The process of gathering and preparing the required documentation and capturing all assets to present to the Court can be time-intensive.
Additionally, if one spouse contests the divorce or divorce settlement, then this will require additional Court hearings, which will take more time.
3. Legal Costs
The longer the divorce is drawn out, the longer you will need legal representation, resulting in higher legal costs. With more financial and tangible assets at stake, a spouse may find that the expected gains from the divorce settlement outweigh the cost of legal representation. In some cases, spouses may try to push out the divorce until they reach an agreement that is in their favor.
4. Alimony & Child Support
In the absence of a prenuptial agreement, chances are alimony will be awarded in a high net worth divorce. The Court will grant alimony based on several factors, which include:
- the standard of living during the marriage
- the length of the marriage
- financial circumstances of each spouse
- parental responsibilities
The same applies to child support. The Court will take into consideration each parent’s income, parental responsibilities, the needs of the child, and other factors to determine an appropriate amount.
For high gross-income couples, the Court may award child support higher or lower than the standard guidelines set forth by the State of Florida.
5. Types of Assets
In other divorces, you will typically see marital assets such as the marital home, automobiles, cash/bank accounts, and retirement accounts. For wealthier couples, you may see additional assets including:
- Real estate, including investment properties and vacation homes
- Luxury items, such as automobiles, boats, and jewelry
- Hidden assets, such as business profits and capital gains
- Business assets
- Stocks and bonds
- Offshore assets, such as financial assets and investments in foreign banks
Valuating Marital Assets
All assets and debts will be examined and classified during a divorce. “Marital assets” are considered any assets acquired by either party during the marriage. The division of these assets will be decided by the Court. Any assets that either party acquired prior to the marriage are considered “non-marital assets” and can be retained.
Valuating assets in a high net worth divorce can be more complex. A third-party forensic accountant may be needed to determine the value of the marital assets.
A common misperception is that assets are always split 50/50, however, the division of assets is handled on a case-by-case basis. There are also a number of statutory criteria that go into calculating equitable distribution, which include:
- The cut-off date – the date in which the divorce was filed. Any asset acquired after this date is considered a non-marital asset.
- The valuation date – the date in which a marital asset is valued and is typically set forth by the Court.
It is important to also note that alimony may offset the division of marital assets.
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