A discussion of the unique challenges that can arise in high net-worth divorces, such as complex asset division, spousal support, and tax implications
Navigating the emotional challenges and hardships that come with divorce is already hard enough. Leaving your partner becomes even more complicated when you have several assets involved. When you own just a little bit of property and your income is relatively low, you can focus more on other matters such as child custody as it becomes much easier to divide whatever assets you do have.
However, when you have accumulated a lot of wealth during the course of your marriage the matter of how to divide it fairly is evident.
What is a High Net Worth Divorce?
A high net worth divorce refers to a divorce involving significant financial assets, typically exceeding millions of dollars. These types of divorces are often complex and fierce due to the significant financial stakes involved for both of you.
High net-worth divorces typically require specialized legal and financial expertise to ensure that all assets and liabilities are accounted for and divided equitably between you and the other party. Issues such as property division, and spousal support, can be particularly complicated in high-net-worth divorces due to the need to protect and preserve significant financial interests. To ensure you are not taken advantage of during this time, you need to get in touch with a qualified lawyer.
Dealing with Complex Asset Division
In Connecticut, complex asset division during a divorce can be a time-consuming process. Typically, the first step in complex asset division is to identify all the assets and liabilities of you and the other party, which may include:
- Real estate holdings
- Retirement accounts
- Investment portfolios
- Business interests
- Other valuable assets
Once all assets have been identified, they must be classified as separate property or marital property. Separate property generally refers to assets acquired by only one of you before the marriage, while marital property refers to assets acquired during the marriage.
Marital property is subject to equitable distribution under Connecticut law, which means that assets must be divided in a manner that is fair and just, though not necessarily equal.
To determine how to divide your marital property, the court will consider a range of factors, such as:
- The length of your marriage
- The income and earning potential of each spouse
- The contributions of each spouse to the marriage
- The standard of living established during the marriage
Ultimately, the goal of complex asset division in Connecticut is to ensure that each spouse receives a fair and just share of the marital estate. In cases involving complex assets, it may be necessary to consult with financial and legal experts, such as lawyers, accountants, business valuation experts, and appraisers, to help assess the value of assets and liabilities and to develop a fair and equitable distribution plan.
Spousal Support in High Net-Worth Divorces
Spousal support is equally important and in high net-worth divorces, you need to make sure you do everything in your power to get the support you rightfully deserve.
In Connecticut, spousal support, also known as alimony or maintenance, may be awarded in high-net-worth divorces to provide financial assistance to a lower-earning or non-earning spouse following the divorce. Spousal support is designed to help the supported spouse maintain a standard of living that is similar to the one enjoyed during the marriage.
In high-net-worth divorces, spousal support can be particularly important given the significant financial stakes involved. The court will consider a range of factors (similar to the factors considered in asset division) to determine the amount and duration of spousal support.
Additionally, the court may also consider the financial needs and obligations of each spouse, as well as any other relevant factors, such as the contributions of each spouse to the marriage and the circumstances that led to the breakdown of the marriage. The goal of spousal support in high-net-worth divorces is to ensure that the supported spouse has the financial resources necessary to maintain a reasonable standard of living following the divorce.
Tax Implications to Keep in Mind in a High Net-Worth Divorce
Aside from the actual payments, there are also certain tax implications you will have to keep in mind when going through a high net-worth divorce in Connecticut. For instance, it’s important to consider the tax consequences of any property transfers, such as the sale of assets or the transfer of retirement accounts, as these can have significant tax implications. Certain alimony or separate maintenance payments are also deductible by the payer spouse, and the recipient spouse needs to include it in income (taxable alimony or separate maintenance). However, you can’t deduct alimony or separate maintenance payments made under a divorce or separation agreement in certain cases. (1)
High-net-worth divorces can be very difficult, and you may end up losing out if you try to handle everything on your own. Make sure you connect with a qualified family lawyer today to get help with your case and improve your chances of getting the compensation you truly deserve.
Need Help Dividing Your Assets? Get in Touch with a Divorce Lawyer in CT Today
Get in touch with an experienced divorce lawyer, Heidi Opinsky, at the Law Offices of Heidi Opinsky, LLC, today to get help with your divorce case, and to get assistance understanding the high-asset division process.
Visit our website to send us a message or call 203-653-3542 now and we will get back to you as soon as possible