The complications of a divorce are significantly higher when you and your spouse have a high net worth and significant assets. As you divide valuable marital assets such as real estate, brokerage accounts, real estate, and business interests, you must take into account the tax implications and make decisions that protect your financial future.
Our experienced Tampa high-net-worth divorce attorneys can help you navigate a significant transition in your life and seek the best possible outcome for you. Our divorce lawyers have a thorough understanding of Florida’s divorce laws and extensive experience in handling divorce litigation with complex financial issues. Every high-net-worth divorce has unique factors to consider. Our divorce lawyers can provide personalized guidance, and tailored solutions to meet your needs.
Contact Florida Legal Advisers for a consultation about your high net worth divorce. Continue reading to learn more about some considerations those facing a high-asset divorce should keep in mind.
What To Do in a High Net-Worth Divorce
A high assets divorce typically involves a couple with a combined net worth of $1 million or more. The primary consideration when a high-net-worth couple gets divorced is usually how the couple’s assets will be divided and whether one spouse will pay spousal support.
If you have substantial income and assets and are planning a divorce, we suggest that you pay attention to the following Do’s and Don’ts:
DO Seek Legal Representation Promptly. An experienced divorce attorney can help you consider the financial consequences as you prepare for a divorce. If you don’t have a prenuptial agreement, everything is on the table. Regardless of your financial acumen, you need reliable legal guidance and dispassionate financial advice. At Florida Legal Advisors, we work with financial experts, including forensic accountants, when needed, to make sure we have a complete picture of a couple’s financial holdings and any recent financial movements when negotiating a separation agreement.
DO Treat Your Divorce like You Would the Dissolution of a Business. A divorce can be difficult emotionally. But it is a mistake to let your emotions control your actions as you negotiate a divorce. Concessions made today can have damaging effects for years to come. Your marriage is coming to an end. Now, you and your partner need to equitably divide what is left and plan for the future.
DO Plan for the Future. Planning for divorce should always be forward-looking. A divorce reshapes each spouse’s finances, as it changes your two-income household into a one-income household. Even if you are financially comfortable, it will make a difference. If your divorce agreement includes marital support or child support payments, for example, they must be affordable for the payer and sufficient for the recipient over the long term.
DO Factor in Tax Consequences. The tax implications of a divorce are relevant for most couples, but the value of a well-to-do couple’s property and the complexities of their investments compound the role that taxes can play in a divorce settlement. There are numerous variables when it comes to taxation after divorce. For example, when a married couple divorces and divides jointly owned marital property, the tax code says there is no gain or loss for either spouse, so typically, there’s nothing to tax. But certain transfers within trusts and certain stock redemptions will be taxable. If property that earns money is transferred from one party to the other, such as rental property, stocks, or bonds, both may be obligated to report income from the asset. We would expect a high-net-worth client to have a financial advisor involved in plans for their separation agreement and to protect their interests.
What Not To Do in a High Net-Worth Divorce
The emotions surrounding a divorce can cause spouses to lash out or act rashly and make missteps that may cause lasting damage. Here are some mistakes in a high-asset divorce that you can avoid:
DON’T Let the Prospect of Divorce Immobilize You. Sometimes, one member of an affluent couple is more financially sophisticated and has a greater share of power in a marriage. This can leave the lower-earning spouse feeling frightened and overwhelmed by the prospect of divorce. This type of imbalance is reason to act quickly to seek the help of a divorce attorney. Engaging an experienced high-asset divorce attorney at Florida Legal Advisers ensures that you have a proactive advocate for your rights at the table as divorce proceedings unfold.
DON’T Try to Hide Assets. Both you and your spouse will be required to present a detailed inventory of your income and other marital assets to negotiate a separation agreement and the equitable distribution of marital property. You will need to distinguish separate property that is not subject to equitable division. Each of you will be required to sign a sworn statement that your financial disclosure is complete and truthful. If your spouse makes a false statement, it is perjury. A divorce lawyer who suspects the other side is hiding assets will hire forensic accountants to try to find them. Further, the family law judge presiding over your high-asset divorce case may fine your spouse or award additional assets to you to penalize your spouse for failing to disclose hidden assets or misstating the value of significant assets.
DON’T Agree to Settlement Terms Just to ‘Get It Over With’ or Out of Guilt. It Is not unusual for divorcing parties of considerable means to adopt an attitude of “give her/him anything” just to get through the divorce process. This approach inevitably leads to financial harm down the road. When the other side’s divorce lawyer realizes the high-value assets you are willing to concede, they will make you pay a steep financial cost. You need a high-asset divorce attorney who will stand firm for you when you.
DON’T Make Any Significant Financial Decisions Without Consulting Your Team. When you are going through a divorce involving high-net-worth spouses or family-owned businesses, it is time to seek trusted guidance from an experienced attorney. Turn to friends and family for emotional support and hire an experienced attorney and financial experts to see you through the legal process of a divorce. Navigating high-net-worth divorce cases requires a sophisticated understanding of family law and tax matters. Every decision has consequences. An experienced family law attorney with Florida Law Advisers can help you navigate a high-net-worth divorce and safeguard your assets now and for your future.
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