What is Considered a High Net Worth Divorces in California?
High net worth divorces are traditionally defined as those in which one or both spouses possess net liquid assets in the amount of $1 million or more. These cases tend to be lengthy and contentious since communal and individual assets acquired before and during the marriage need to be identified, valued, and sometimes investigated.
Additionally, the court will also have to determine an equitable distribution of these assets. Assets are typically not split 50/50, but instead distributed in a manner that is fair. To determine an equitable division of assets the Court will consider several factors, such as length of the marriage, each party’s contributions to the marriage, incomes, individual debts and assets, and more.
What May be Distributed in a High Net Worth Divorce?
- Real Estate (Domestic/International)
- Bank Accounts
- Jewelry and Antiques
- Business investments
- Retirement Benefits and Pensions
- Life Insurance
What Are Some Complications in a High Net Worth Divorce?
Standard of Living: To ensure that the lower-income spouse and, if applicable, minor children, maintain the standard of living as lived during the marriage, the Court may deviate from the support guidelines that are calculated by the state computing software, also known as the Dissomaster.
Identifying Assets: There are two types of property in divorce—separate property and marital property. Property owned by either spouse prior to marriage is considered separate property cannot be divided, but on the other hand, assets acquired during marriage are considered marital property and is subject to property division. Is it possible for these two types of properties to blend throughout a marriage, in which case it is critical to accurately identify assets.
Evaluating Assets: To divide assets in a divorce, the value of each must be accurately determined. To properly value assets, spouses are required to turn over financial records. It may occur that assets are not identified correctly, disclosed or accurately valued, in which case a spouse may hire a forensic accountant and/or appraiser.
What if You Have a Prenuptial/Postnuptial Agreement?
Prenuptial or Postnuptial Agreements are usually common in these marriages when one spouse or both are wealthy prior to the marriage, but it is important to understand that these agreements may not be entirely enforceable. In cases where one or both spouses did not fully disclose their assets prior to the execution of the agreement or if one spouse signed against their will, it is possible for the Court to vacate the agreement.
If you have questions about high net worth divorces, call us to speak with an attorney.