What Is High-Asset Divorce?
A divorce with high assets at stake, such as multiple homes, substantial investments, or a family business can quickly become complicated and contentious. A divorcing couple’s affluence can make it difficult to resolve such issues as division of assets, alimony, or even child custody matters.
Although ending a marriage in which there are significant assets at stake can be extremely stressful, there is hope. The experienced Huntsville divorce lawyers at Leigh Daniel Family Law can fight for your financial interests as you go through a divorce.
Count on us to:
- Clearly explain what to expect as you navigate Alabama’s complex divorce process.
- Protect your rights, particularly regarding your assets and access to your children.
- Resolve thorny issues with patience, insight, and special attention to detail.
- Stand with you during this difficult time.
Huntsville attorney Leigh Daniel has more than 20 years of family law experience and is focused on helping residents of Huntsville and Northern Alabama fairly resolve the issues that arise in high-asset divorces. Count on our skilled legal team to provide personalized attention and strategic solutions to your problems, including tailored approaches to fighting for a fair division of assets.
Contact us online today to schedule a case consultation or phone (256) 551-0500.
What Is Considered in a High-Asset Divorce?
In a high-asset divorce, we typically see a household income of $250,000 a year or more, and a large amount of property and assets to divide. This often includes multiple pieces of real estate and substantial investments. Often one or both spouses are employed as executives or professionals, are business owners, or maybe involved in professional sports or entertainment. It may be that the couple’s money is from inheritance.
In high net worth divorces, the primary consideration tends to be how the couple’s assets will be divided. This can be complicated when assets that might be considered marital property include executive compensation packages, privately held businesses, real estate, memberships, and extensive personal property that may include automobiles, art, antiques, or jewelry collections.
Under Alabama divorce law, marital assets such as money and property obtained during the marriage are to be divided equitably in the separation agreement. “Equitable” is not the same as “equal.” Equitable distribution of marital property takes into account such factors as how long the parties were married, the needs of each party, the financial contribution each party made during the marriage, the lifestyle that each party is accustomed to leading, and the age and health of each party.
Child custody and support payments are always an issue if a couple with children divorces. Alabama’s courts typically use the “Income Shares Model” to calculate child support, requiring each parent to provide the same ratio of support to the children after their divorce that they would have if they had remained married. However, if the couple’s combined gross income exceeds $240,000 per year ($20,000 per month), child support guidelines do not apply.
In high-asset cases, the court determines child support based upon what it deems to be the reasonable needs of the children and the appropriate contribution of each parent. Child support planning should take each child’s age and current and future needs into consideration. Families of means may need to plan for private school tuition, summer programs, summer camp, study abroad, tutors, or a nanny. Trusts may need to be established to fund eventual needs for college tuition and student housing because the needs of a child over 18 years old would not be subject to provisions of a divorce decree.
A third major consideration in a high asset divorce is alimony, particularly if one spouse is the primary source of the family’s income. Spousal support has been less of an issue in Alabama since reforms in 2018 reduced the reliance on “periodic alimony,” the award of payments that go on indefinitely. Today, spousal support is approached as rehabilitative, with a five-year payment plan typical, but judges can make exceptions.
Regardless, Alabama law prohibits alimony payments that last longer than the length of the marriage if the court finds reason to deviate from rehabilitative alimony. Longer payments require the judge to find that the receiving party lacks a separate place to live or that their separate place to live is insufficient to enable them to maintain their standard of living as it existed during the marriage. The judge also must find the paying party has the ability to supply the alimony without economic hardship, and the circumstances of the case make it equitable.
When facing these issues, our goal is to guide you and protect your interests as we work to negotiate a settlement agreement that both parties can take before a judge to obtain a divorce. If there is a prenuptial or postnuptial agreement in place, the agreement must be reviewed to determine whether its provisions apply, or whether it should be contested through appropriate litigation.
If your spouse refuses to negotiate a settlement in good faith, we will not hesitate to change our approach from negotiating to litigating. If we must go to court without a settlement agreement in place, your attorneys from Leigh Daniel Family Law will make persuasive arguments on your behalf, and the judge will decide such issues as child custody, division of assets, and alimony.
When Your High-Asset Divorce Turns Contentious
As your attorneys, our primary objective is to protect you financially as you go through a divorce. You can take some steps to protect yourself, primarily by documenting the ownership and value of all of your assets, regardless of their expected status upon your divorce. Each spouse will be required to submit to the court a full list of assets – both marital and separate property – to properly divide the marital estate.
If you are contemplating divorce, as soon as possible, you should:
- Make copies of all your valuables and all legal documents (deeds; tax returns; insurance policies; bank, pension statements, retirement accounts, and estate planning documents).
- Determine what you believe to be the ownership status of each asset:
- Marital property – obtained jointly during the marriage
- Separate property – owned prior to marriage, or inherited property or gifts
- Have all tangible assets professionally appraised
- Secure any personal property of value that belongs to you
- Obtain proof for any inheritance or assets received as gifts
- Cancel all jointly owned credit cards
- Remove and secure half of any joint bank accounts. Do not withdraw more than half.
- Remove your spouse as a beneficiary on insurance, pension, or other transferable accounts.
Courts can only include known assets in the divorce decree, so your list of financial accounts and assets needs to be comprehensive. If your spouse is hiding or divesting assets to deprive you of your rightful share, the assets must be located or proven to exist for the court to consider them among your marital assets.
If needed, Leigh Daniel Family Law can obtain the services of a forensic accountant to help uncover hidden assets and ensure the division of your marital estate is based on an accurate and comprehensive asset disclosure.
Additional Issues Possible in High-Asset Divorces
As your attorneys, we will work with you as you inventory your assets, your spouse’s assets, and your joint asset and make a preliminary identification of the ownership status of all property. The value of all property and assets must be established.
Typical issues to examine in a high-asset divorce include:
- Business assets. Especially in the case of a family-owned business or one spouse’s professional practice, we must consider what each spouse contributed to the enterprise during the marriage and what they are owed.
- Future earning capacity of one or both spouses, particularly if one or both have professional licenses or degrees obtained during the marriage
- Deferred compensation, stock options, and other corporate benefits
- Retirement funds, such as pensions, IRAs, and 401(k) accounts, and the potential need for a qualified domestic relations order (QDRO) to direct funds toward the other spouse, child support, or alimony
- Unencumbered investments and their value in preparation for division
- Tax issues and the avoidance of capital gains taxes due to receipt of marital assets.
Sometimes, a high-asset divorce also becomes a high-profile divorce, with unwanted outside attention that is potentially injurious to both spouses and possibly others. If a divorce has become contentious, one spouse might seek to leak information to hurt the other. Regardless, if your divorce becomes the object of undue public attention, we can enact strategies to protect your reputation, as well as your wealth.
How We Can Help With Your High-Net-Worth Divorce
Determining how best to protect you in a high-asset divorce in Alabama requires the ability to examine and understand your financial assets and the willingness to listening to you and your desires. The Huntsville divorce lawyers of Leigh Daniel Family Law can conduct a thorough review of your assets and your divorce case and develop a strategy to pursue the outcome that best serves your needs and financial interests.
Our experienced Huntsville divorce attorneys will do everything legally possible to protect your interests in even the division of assets and in other divorce proceedings.
To learn more about how we can fight for your rights during this difficult time, contact us online today or call us at (256) 551-0500.