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Preserving Your Wealth in Your Divorce
Every divorce has its difficulties and complications. But high-net-worth divorces are typically much more complex because of the assets involved. Simply put, there is more at stake financially in a high-net-worth divorce, which can lead to disputes with your soon-to-be-former spouse and worries over what you could potentially lose if things don’t go your way. For these reasons, it’s important to have legal representation from a law firm that understands the intricacies inherent in high-asset divorces. The right legal guidance can make a significant difference in how your divorce resolves and what assets and property you walk away with.
Experienced High-Net-Worth Divorce Attorneys Protect Client Interests
At Men’s & Fathers’ Rights Divorce Lawyers by Schultz & Associates, LLC, we have extensive experience successfully helping clients in high-net-worth divorces. We’ll leverage our experience to your advantage, providing skilled legal advocacy throughout every step in the process. Our goal is to safeguard your interests in divorce, so you can move on with your life with your wealth intact. Call us today at (201) 880-9770 to arrange a consultation with our Hackensack high-net-worth divorce attorney.
What is a High-Asset Divorce?
What is considered a high-net-worth divorce? There isn’t a set-in-stone number that designates couples as high-net-worth. But in general terms, people in high-net-worth marriages have significant liquid assets—such as $1 million or several million. These assets may include:
- Businesses or professional practices
- Stock and stock options
- Equity compensation
- IRAs, profit sharing, pensions and other retirement assets
- Residences, vacation properties, rentals and commercial real estate holdings
- Valuable cars, boats, artwork, jewelry and other personal property.
There are a lot of not-so-straightforward legal questions surrounding these kinds of assets, regardless of whether they are held in just one spouse’s name or jointly. What is Separate and Marital Property in a High-Asset Divorce?
In general, assets obtained during marriage are considered marital property and are subject to division when the marriage ends. Also in general, assets that parties bring into the start of their marriage or that they obtained through an inheritance during the marriage start with the premise that they may be separate property and not subject to division.
But in reality, there are exceptions to every rule, of course! Sometimes assets owned prior to marriage can become marital assets. There can be situations in which assets are controlled or titled in one person’s name, becoming marital property as far as the law is concerned. Here are some examples of instances in which separate property may become marital property:
- Money that one spouse receives through inheritance is separate property. But if it’s put in joint savings or investment accounts, it could be considered marital property.
- If one spouse owns a house before the marriage and the title is changed so both spouses are listed as owners afterward, it may be considered marital property unless the circumstances make a good case as to why it should not be.
- Even if a house owned before marriage remains only in the name of one spouse, its increase in value since the marriage started may be divided.
Proving who owns what in a high-asset divorce can be very challenging and require in-depth insight into New Jersey divorce laws. At Men’s & Fathers’ Rights Divorce Lawyers by Schultz & Associates, LLC, our high-net-worth divorce lawyers have that insight.
We will zealously work to protect the property you brought to your marriage and to ensure that marital property is fairly divided, either through a negotiated settlement or by a judge if your case goes to trial.
Identifying and Valuing Assets for Marital Distribution
Before marital property is divided it must be identified. And any disputes regarding whether it is marital property or separate property must be resolved before we even get to the conversation of how much it is worth. If they can’t be, the person claiming it’s their property will need to prove it to the court. Once all marital property is identified, it must be valued.
In some instances, valuing property is relatively straightforward, such as for a bank account. In other instances, it is much more complex and requires the help of expert independent appraisers, forensic accountants, or others, such as when a business is being valued or making the income analysis of a sole proprietorship. It all depends upon the property or asset being valued.
What Not to Do in a Divorce — Never Try to Hide Assets
Sometimes people getting divorced may find it tempting to hide property from the other spouse, maybe by transferring assets to a third party or burying them in shell businesses. Hiding marital assets is not only a big mistake that can severely impact your case when property distribution decisions are made — it’s also illegal!
During divorce, full disclosure of all of your assets is the only smart way to go. Just because you list an asset, this doesn’t automatically mean we will divide it. A conversation about whether it is in the marital pot or is exempt from equitable distribution must be had first. And if you suspect your spouse of hiding assets, we will investigate to discover whether an attempt is being made to cheat you out of fair distribution. If it is, we’ll hold them accountable.
We Have the Necessary Resources for High-Asset Divorces
Our law firm works with forensic accountants, business valuation experts and others to ensure our high-net-worth divorce clients have the experienced assistance they need. The expertise of our resources and our experienced high-net-worth divorce attorneys could be critical in the outcome of your divorce. Call our Hackensack law firm when you need help at (201) 880-9770.
Negotiating High-Net-Worth Divorce Settlements
When divorce settlements can be negotiated between the parties involved, instead of being decided in court, it usually causes less stress for everyone. If you and your spouse are on decent terms, negotiating a settlement may be an option for you, but negotiations shouldn’t be approached lightly. With so much on the table, it’s important to have a plan from the start. You should know what your goals are and what financial assets you want to come away with. In New Jersey, property division is based on equitable distribution, which means you are entitled to a fair share of marital wealth. When divorce cases go to trial, judges decide who gets what based on this concept.
Having the help of an attorney who has your interests at heart is crucial in high-net-worth divorce settlement negotiations.
Your attorney will help you develop a strong strategy going into negotiations and will look out for you throughout the process, asserting your right to an equitable part of the marital estate. Call us for help with your divorce settlement at (201) 880-9770. And if there is too much conflict in your situation to make settlement a reality, we will stand up for your rights in court.
How Do the Courts Divide Marital Property in Divorce?
Should your divorce go to trial, the judge will divide your marital property based on the factors spelled out in New Jersey statute NJSA 2A:34-23.1. The statute includes numerous factors that judges consider when making property distributions. In addition to basics like the length of the marriage and the ages and health of both parties, just a few of the financial factors the judge will consider include:
- The income or property each spouse brought to the marriage
- The standard of living established during the marriage
- Prenuptial and postnuptial agreements regarding assets and property
- Tax consequences of the proposed distribution
- The contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital property, as well as the contribution of a party as a homemaker.
There are various ways to effectuate the equitable distribution of the assets to be divided. Some take a straight percentage of the value of the assets. Others want to trade one asset for another. Some offset varying assets so no physical money must be exchanged between the parties. It really just depends what is best, given the totality of the circumstances. That said, there is a cautionary tale here, too, especially if you are attempting to do an offset. The value of some assets today are not as liquid as other assets. For example, if you are trading value in a retirement asset for equity in a house, which one is more valuable today? The equity in the house — because those funds, hypothetically, could be liquidated very easily, without penalty, versus the retirement asset, where you have to wait to receive the money until retirement or liquidate early with tax consequences. So, these two assets would not be a fair trade, even though on paper the dollar figures may be close. Get the Help of Our Skilled Hackensack High-Net-Worth Divorce Attorney.
Equitable distribution is based on fairness, which is why you want the assistance of a high-asset divorce attorney familiar with New Jersey law and how area judges perceive fairness in divorce cases. A lawyer from Men’s & Fathers’ Rights Divorce Lawyers by Schultz & Associates, LLC can effectively tell the story of the sacrifices, work, and effort you put into the marriage and building your wealth. The quality of the evidence and the strength of the arguments will carry the day when these decisions are made, whether by a judge or during negotiations for a high-net-worth divorce settlement.
Can Alimony Be Awarded in a High-Net-Worth Divorce?
Alimony, or spousal support, is paid by one spouse to the other. In a high-net-worth divorce, this amount can be significant, especially if there is a large disparity in incomes between the spouses.
Alimony is meant as a bridge-the-gap protocol in order for both parties to maintain a comparable standard of living enjoyed during the marriage, with neither party having a greater entitlement to maintain the high standard of living than the other.
There are differing types of alimony, too, that may be appropriate depending on the situation: such as Limited Duration Alimony, Open Durational Alimony, or Reimbursement/Rehabilitative Alimony.
New Jersey statute NJSA 2A:34-23(b) sets out factors a judge must consider when there’s a request for alimony and, if it’s given, how much and for how long. In addition to maintaining a reasonably comparable standard of living to that established in the marriage, judges will take into account other things, including how property was equitably distributed, income available to either party through investments, tax consequences to both spouses of alimony awards and the contributions of each party to the marriage, both financially and non-financially.
With limited duration alimony, the support payment can’t last longer than the marriage existed unless there are exceptional circumstances. However, open durational alimony may be applicable for marriages of 20 years or more and could continue ‘indefinitely’ or until a triggering event such as good faith retirement at retirement age or when the recipient spouse remarries, cohabitates, or dies. A substantial change in the life of the party paying or receiving spousal support can be grounds to modify alimony payments.
Like the division of assets, alimony is based on equity or fairness.
A judge would decide based on the facts of your case, the factors spelled out in the statute, and what appears to be fair. If you’re involved in an alimony dispute, an assertive high-asset divorce attorney from Men’s & Fathers’ Rights Divorce Lawyers by Schultz & Associates, LLC can describe the facts in a way that’s favorable to you and articulate compelling arguments to make the difference in your dispute.
What Makes High-Net-Worth Divorces Different?
New Jersey law applies to all divorces, so the main issues are the same no matter how wealthy a couple may be. But there are some critical factors when high-net-worth couples divorce. Financially, of course, there’s much more at stake and the financial picture may be more complex, requiring experts and a sophisticated analysis of the issues.
How Assets of a Business Are Handled in a High-Net-Worth Divorce
If a business is subject to division, it opens up many issues that need to be resolved:
- The business needs to be valued.
- The spouse involved may use it to hide assets to prevent sharing them with the other spouse.
- There may be an ownership agreement with co-owners, stating what will happen in case of a divorce.
- Income may not be clear. Personal expenses may be paid through the business and earnings that would otherwise fund the marital lifestyle may be retained in the business instead of a joint bank account with your spouse. (Note: we count retained earnings as income). If a spouse is an executive at a large company, there may be several types of income that must be calculated, such as Restricted Stock Options (RSU’s), Long-Term Incentive Compensation, Grants, Commissions, etc.
- There also may be deferred compensation benefits, a pension, and other retirement plans.
- There could be termination benefits and signing bonuses.
- Bonuses and other compensation may be awarded over several years upon triggering events.
We retain accountants, forensic accountants, and business valuation experts to work on high-net-worth cases. Their expertise could be critical in the outcome of your divorce, especially if they are needed to testify during a trial.
The Importance of Property Distribution in New Jersey High Net Worth Divorces
Regardless of your net worth, when you get divorced in New Jersey, the assets in your “marital estate” are subject to equitable distribution. Equitable does not necessarily mean equal, but it does mean that both spouses are entitled to a substantial share of the couple’s marital property regardless of who was responsible for the accumulation of wealth during their marriage.
If you have substantial wealth that you need to protect in your divorce, you will need to work with an experienced attorney. At Men’s & Fathers’ Rights Divorce Lawyers by Schultz & Associates, LLC, we focus our practice on high net worth divorce representation. We have represented wealthy individuals throughout New Jersey in complex divorces, and we can use our experience to ensure that you receive the property to which you are legally entitled.
5 Key Factors in High Net Worth Divorce Property Distribution
1. Equitable Distribution
As we mentioned, equitable does not necessarily mean equal. But, if this is the case, what exactly does “equitable” mean? The answer will vary from one divorce to the next, as New Jersey law requires appropriate weighting of a list of factors on a case-by-case basis. When we represent you in your divorce, we will collect the evidence needed to use these factors to your advantage, and we will work to preserve as much of your wealth as possible under the applicable provisions of New Jersey law.
2. Asset Valuation
In order to equitably distribute a marital estate, it is necessary to have a clear picture of the value of each individual asset in the estate. We work with a number of appraisers who have specific experience valuing assets for purposes of equitable distribution, and we can work with specialists (such as business appraisers) if necessary in order to make sure that you do not unknowingly give up more than your fair share in your divorce. If necessary, we can also challenge your spouse’s appraisals, and we have a variety of means available for ensuring that your equitable distribution is be based upon appropriate valuations.
3. Tax Considerations
For wealthy individuals, the distribution of marital property in a divorce can potentially trigger substantial tax liability. Our attorneys have a deep understanding of the tax issues involved in high-net-worth divorces, and we can help structure your property distribution to minimize your overall tax obligation.
4. Prenuptial and Mid-Marriage Agreements
The one way to avoid New Jersey’s equitable distribution rule is by entering into a prenuptial or mid-marriage agreement. If you and your fiancé or spouse signed an enforceable agreement that addresses property rights in the event of a divorce, we can use your agreement to make sure your wealth is secure.
5. Protecting What Matters Most
If you do not have a prenuptial or mid-marriage agreement, during the property distribution phase of your divorce, you will need to make some important decisions about what matters most. We can help you explore your options for protecting as many of your prized possessions as possible, and we can execute a strategy focused on protecting the assets you wish to keep for the rest of your life. Frequently, we represent clients who have a significant interest in protecting:
- Art and coin collections
- Boats
- Businesses
- Classic cars
- Deferred compensation
- Gifts from parents
- Jewelry
- Judaica
- Oriental rugs
- Property outside of U.S.
- Rental and investment properties
- Stocks
- Summer houses
- Timeshares
Our High-Net-Worth Divorce Lawyers Protect Your Financial Future
You have the right to be treated fairly in your divorce. We’ll work to make sure you are. To learn what we can do for you based on your unique situation, contact Men’s & Fathers’ Rights Divorce Lawyers by Schultz & Associates, LLC to arrange a confidential consultation.
Call our Bergen County law office at 201-880-9770 to speak with one of our experienced high- net-worth divorce attorneys or contact us using our online form.
Client Testimonial
”In getting to know Carrie, I have found her honesty, integrity, and concern for her clients to be remarkable. She and her team take the time to listen and understand each client’s situation, and then work tirelessly on that person’s behalf. If you are looking for a divorce/family law firm that provides effective communication and professionalism, you have found the right attorney in Carrie Schultz.” – Marcia Marino (Google Review)
Carrie S. Schultz, Esq. – author
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