Couples who are going through divorce often disagree about issues like child support, custody of children, and property division. In many cases, they also engage in disputes regarding alimony. While these issues are difficult, regardless of the financial status of the couple, when the parties are considered high net worth, many issues become more complicated when there are significant assets.
High Net Worth Divorce and Private Agreements
In many cases, those who had significant assets prior to marriage will have a signed prenuptial agreement. The court will review the terms of the prenup to make sure it is valid. Should the agreement be determined to be enforceable, there may be fewer issues with property division and spousal support payments if they are clearly delineated in the agreement. Reasons an agreement may be deemed invalid including a failure to disclose all assets or forcing the agreement to be signed prior to marriage. At DeShon Laraye Pullen PLC we can review your prenuptial agreement on your behalf and determine if there are any flaws.
There may also be cases where a couple entered into a post-nuptial agreement. These agreements are often entered into when one of the parties acquires a business or inherits a business. The court will review any post-nuptial agreements which the couple has signed because the court will want to ensure the agreement is fair and equitable. These agreements may be entered into at any time following a marriage and therefore, the court is likely to ask numerous questions pertaining to the reason for the agreement being presented.
High Net Worth Divorce and Child Support
Arizona has guidelines which the court will follow when establishing child support payments as part of a divorce. However, these guidelines may have a different impact on high net worth couples because their child may have different financial needs. For example, children of high net worth couples may have a nanny who cares for them, attend private school, or attend camp when school is not in session. These additional expenses may result in additional child support payments.
Another concern for parents who have a high net worth is college tuition. Regardless of the age of the children, parents who are going through a divorce may also consider additional funding for college tuition or create a trust for the child for their future needs. These are issues which should be discussed with your family law attorney at DeShon Laraye Pullen PLC to ensure your child’s needs for today, and for their future are addressed during the divorce process.
High Net Worth Divorce and Property Division
Because property is divided using the “community property” laws in Arizona, there are may be several challenges to property division. Generally, this means any property which was acquired during the marriage will be divided equally between the two parties. This will include pension accounts, bank accounts, brokerage accounts which were opened while the couple shared a home. However, both parties may have had individual property which is not usually subject to community property laws because it was owned prior to the marriage or because the property was inherited by one of the parties during the marriage.
Couples who have a high net worth should also be aware the court has discretion to potentially divide assets which were owned prior to the marriage. You should consider discussing this potential with your family law attorney so you understand what this could mean for assets which you originally thought might be safe from division. Keep in mind while many couples have household goods which they can normally agree about, high net worth couples may also have to deal with artwork, antiques, and jewelry which can complicate the division of property.
When One or Both Owns a Business
High net worth couples may also have business interests either jointly or separately. When dealing with property division, the courts may order a forensic accounting to determine the value of the business as well as determine future earnings which may be awarded as part of the final divorce settlement. Business division between couples can be complicated because in some cases, there are third parties who own part of the business. The court will want to determine what portion of the business is owned by one or both of the parties to the divorce before making a final decision. Both parties should be aware it is highly unlikely the court will mandate both parties remain owners unless there is an agreement between the couple to continue to operate the business with both acting in good faith.
Tax Considerations and High Net Worth Divorces
Anytime a couple is filing for divorce, there are tax considerations. In the case of high value divorce, this can be more complicated. There are numerous issues to address including capital gains when property must be sold, whether the couple will file a joint return for the tax year in which they were divorced, and who will claim the children as dependents going forward. These issues must all be addressed to ensure there is an equitable solution.
Divorce is never easy. Generally, parents both want what is best for their children and there may also be several issues where a couple can agree on how they will be addressed. However, there may also be a need to litigate in court in order to resolve complicated divorce issues. Working with an attorney who has experience dealing with complex divorce issues including handling divorces for high net worth couples can make a significant difference in the outcome.
Whether you have decided to file for divorce, or your spouse has filed for divorce, you need an experience divorce attorney who will guide you through the process. When you and your spouse have high value assets, the process can be further complicated which is why working with an experienced attorney is necessary. Call DeShon Laraye Pullen PLC today at (602) 252-1968 and let us help you through this difficult process. We understand this is a difficult time but you can feel confident we will take the time to understand your goals and help you make the right decisions for you and your family.