Below are some of the most important, common, and frequently asked questions (FAQs) about what to expect during a high net worth divorce. These are provided as family law tips for you to use in discussions with your Utah divorce attorney. This general information can help ensure that your rights are fully protected, that custody issues are quickly resolved, and that you receive all assets to which you are legally entitled in your Salt Lake City Utah high net worth divorce.
High Net Worth Divorce FAQ
A high net worth divorce is one in which the couple has a large number of financial assets. The financial matters of high net worth couples are naturally more complex in a divorce than in more common divorces involving fewer property division issues. You will need to work with an experienced Utah high net worth divorce lawyer to ensure all your rights are fully protected and that you receive the fairest possible outcome of your case.
High net worth divorces involve more marital assets to divide than an average divorce. That may include a business that must be sold or an employment separation of one of the spouses. Real estate issues, stock investments, insurance assets, retirement funds, tax matters, estate planning, and other financial matters are often more extensive and more controversial in a high net worth divorce.
Most divorces involve some difficult decision-making and unfamiliar legal terminology. But, the financial part of a high net worth divorce is much more complex. More assets must be divided; there are longer negotiations, more details around every point, and many more potential causes for controversy. Property issues can be complicated, especially those involving businesses, trust issues, tax-related concerns, negotiating compensation packages, and so on. Your Salt Lake City lawyer for divorce will guide you through the process.
In divorces involving high income, the parties and their divorce attorneys are more likely to meet with more complex retirement account and planning issues, trust account issues, as well as income tax and other tax-related issues. It may also become necessary to examine prenuptial agreements and reevaluate ownership of various assets. When one spouse has a high income, it is likely to affect alimony and child support decisions from the court. If both spouses have large incomes, the judge might not grant alimony at all.
Some financial issues which can become an issue in high net worth cases include various valuations and distributions of financial and other assets such as:
- Your and/or your spouse's medical, legal, consulting, or other professional practice
- Your and/or your spouse's increased earning potential from academic degrees or professional licenses
- Family businesses and other closely held businesses
- Complicated transactions involving business(es) you and your spouse own together
- Primary residences, vacation homes, residential investment properties, commercial and industrial buildings, undeveloped land, and another real estate (real property)
- Retirement assets such as stock options, bonds
- IRAs, 401(k) accounts, and pensions
- Trusts, Money Market accounts, and bank checking and savings accounts, CDs, and other liquid assets
- Life insurance policies
- Intellectual property, such as patents, trademarks, and copyrights
- Personal property, including vehicles, boats, jewels, artworks, antiques, and other collectibles
If both parties in the marriage contributed to the growth of a business, or if the business's revenues have grown significantly during the marriage, then the business is classed as a joint asset. To protect your business assets during a divorce, you should focus on:
- Obtaining a fair valuation
- Arriving at an agreement that removes your spouse (from whom you will soon be divorced) from the business
- And working on arranging for payment to your spouse at the time of the divorce settlement, to be made through your personal assets, and perhaps through raising capital
This is typically the most complex area of property division in a divorce. But, the approach to determining the value of ownership by each spouse is relatively straightforward in principle. If both spouses are involved in operating a business, both need to have their interests in the business valuated.
Determining you're and your spouse's respective contributions to the business is likely to necessitate having the business evaluated in its entirety, having all of its assets assessed and the value of your spouse's and your own contributions each determined, in addition to other factors.
Title 30, Chapter 3, Section 5 of the Utah Code, provides for changing your beneficiary after divorce. The statute states that if you do not change your beneficiary after divorce, then your ex-spouse, as the listed beneficiary, will be the legal recipient of the benefits under the plan and will receive the benefits as allocated in the retirement plan.
Child support — Child support is a relatively simple matter in most Utah divorces, including high net worth cases. It is calculated using basic formulae. Temporary spousal support is also calculated in a similar way.
However, do not assume that the calculation program used by the courts to determine child support or temporary spousal support will apply in your case. When income is very high, the computer may generate a support order that is beyond reason. An experienced attorney is adept at handling this complicated area with the family court.
Income for support purposes — Your income is sure to be one of the central areas of focus in your high net worth divorce case, especially when you have multiple income sources, such as:
- Base income
- Profit distributions and bonuses
- Interest or passive income
- Company perquisites
- Phantom Income
Persons divorcing at or after ten years of marriage can receive Social Security benefits from your ex-spouse's Social Security record. This applies even if your ex-spouse has remarried. The following requirements apply:
- You must be unmarried.
- You must be age 62 or above.
- Your ex-spouse must be entitled to Social Security disability or retirement benefits.
- The benefit you would receive based on your own income earnings is a lesser amount than the benefit you would receive based on your ex-spouse's income earnings.
Strategies for savings, investment, educational funding, retirement, estate and tax planning, retirement, and other financial strategies all require new analysis when divorce disrupts a family’s well-laid plans. More acutely, a financial advisor can perform the financial forensics often necessary in high-net-worth divorces to locate assets and liabilities, protect a business, manage complicated financial disentanglement and tax issues, evaluate insurance portfolios, and so on.
The divorce team ideally should include a financial advisor working with a Utah high net worth divorce lawyer to help clients make objective financial decisions, not emotional choices during a divorce. Other professionals who may also be needed during a divorce involving high net worth may include business brokers, art appraisers, forensic accountants, real estate appraisers, and others.
Couples in a high-net-worth divorce may have sizable assets in the United States and elsewhere. Managing tax strategies for the parties in a divorce with substantial assets, wherever those are located, can be a challenging undertaking. The transfers of various forms of high-value property and payments for such between ex-spouses, sales of corporate interests, and other tax complexities are likely to require support from a tax specialist.
Child custody cases can either go smoothly, when parents are able to plan and work well enough together to arrange a mutually agreed parenting plan. Or, they can be rough, but still get resolved without litigation. Or, they can be so contentious that the custody decision must fall to the authority of the family court judge.
Unless allegations of abuse, or of parental alienation or gatekeeping are involved, the family court typically does not intervene to decide custody arrangements. Use these tips to smooth the custody decision process, and to arrive at the best arrangement for your child and both parents:
Be realistic — Think about your schedule. Arrange your new role as a single parent with as much flexibility as possible in your work and travel routines.
Before you move out — There are pros and cons to moving out:
- If there is a risk of being falsely accused of domestic violence,
- Or, if you fear domestic violence may occur during the divorce, then it is necessary to move out.
- And, your spouse may be insisting that you move out.
- But, notwithstanding financial concerns, if your spouse fights to prevent you from seeing your children, then moving out can work against you in your custody case.
High Net Worth Divorce Attorney in Salt Lake City, Utah
Attorney David Pedrazas is a Salt Lake City family law lawyer at the Law Office of David Pedrazas, PLLC. For over 20 years, Attorney Pedrazas has been helping people going through divorce. He is devoted to helping his clients move forward with their lives after divorce.
Efficient process — We know that you and your family are going through a very difficult situation, and we understand your need for help from caring professionals who are committed to making the process as simple and efficient and as possible.
Protecting your rights — Our priority is to make sure that each client fully understands her/his legal rights and to help every client make fully-informed decisions for the future of happier times to come, beyond divorce. And, the Pedrazas professional legal team work to defend your rights in a divorce case and ensure that you receive a fair division of property, including all marital assets to which you are legally entitled.
Professional Excellence — Utah attorney David Pedrazas has received much recognition for professional excellence throughout his years of serving the Salt Lake City community, including:
- One of the Top 10 Attorneys in Salt Lake City, UT, according to The National Academy of Family Law Association
- Included in the Premier Top 100 Trial Attorneys in Family & Divorce, evaluation by the American Academy of Trial Attorneys
- Named in the 10 Best Divorce Attorneys for both years 2014 and 2015, per the American Institute of Family Law
For more information about high net worth divorce, or to schedule a divorce case review in Salt Lake City, call the Law Office of David Pedrazas, PLLC. Divorce Attorney David Pedrazas will answer all of your questions, evaluate your case and advise you on the best course of action based on your individual needs and preferences.
The Law Office of David Pedrazas, PLLC has been serving Utah families going through divorce and other matters of family law since 1998.
