A divorce of any kind can be both emotionally and financially taxing. In the case of a high-net-worth divorce, however, where at least one spouse earns upwards of $1 million and beyond, valuing and dividing assets properly can present a host of new challenges. Partnering with a high-net-worth divorce lawyer is essential for both parties if they want to walk away from the divorce as financially sound as possible.
Traditionally, a high-net-worth divorce has been defined as one that involves more than $1 million in net liquid assets. Although this number has now significantly increased to involve multiple millions of dollars in net liquid assets, a solid definition of that number is not so clear to come by. Regardless, it is generally understood that a high-net-worth divorce attorney is an absolute necessity in such circumstances.
The first thing to do when navigating a high-net-worth divorce is to identify and properly value all assets. Marriage assets and individual assets must be differentiated between. More specifically, all assets including property and debt must be outlined, declared, and valued. Assets acquired after the marriage like joint property (i.e. a marital residence or a joint retirement fund) and assets acquired prior to the marriage (such as a business that was established before the couple wed) should be properly established in their own rights, so as not to muddy the waters of who is owed what upon separation. Certain assets, however, such as third-party gifts like inheritances and personal injury awards, are exempt from marital assets, even if they were acquired after the marriage.
Another critical factor that may accompany a high-net-worth divorce is a spouse attempting to hide assets. This is more common in high-net-worth divorce cases than in others because of the significant financial risk that is involved. In the event that one spouse owns or co-owns a lucrative business, he or she may try to transfer assets to a third party like a business partner. In the event that the ex-spouse does not have a business partner and is the sole owner of the business, he or she may attempt to transfer funds to another third party such as a child from a former marriage. It is important to note that hiding assets and transferring funds in this manner is completely fraudulent and illegal. Hiding assets is punishable by law and can result in civil or even criminal penalties. Oftentimes an investigator or forensic accountant is needed in this instance. This professional can examine income tax returns, public records, and bill statements.
If you are looking to uncover hidden assets from your ex-spouse, your high-net-worth divorce attorney can be a great asset. Your lawyer can submit questions to your ex-spouse through written interrogations and oral depositions. While this may not be enough to fully prove an ex-spouse of hiding assets, in conjunction with a legal investigation it can hold a lot of clouts.
In the unfortunate event that a spouse gets away with hiding assets during divorce proceedings, a top-notch high-net-worth divorce lawyer can take after the divorce has concluded in order to recover assets. Verifiable proof is required in such instances, but hidden assets are not protected if proof is legitimate.
Curtis J. Romanowski of the Romanowski Law Offices has personally handled one of the highest net worth divorces in New Jersey’s state history, with a marital estate valued in the $320 million range. To work with the firm for your high net worth divorce case, please contact Romanowski Law Offices or call us directly at 732-242-4564.