Six Unique Expenses in a High Net-Worth Divorce

Six Unique Expenses in a High Net-Worth Divorce

Posted on December 09, 2024 in Divorce

Divorce can be a stressful process, but when high-value assets are at stake, it can be that much more complicated and expensive. For one, the assets involved in a high-net-worth divorce are worth a great deal of money. They can also be unique, encompassing anything from classic cars to intellectual property, to more traditional assets like real estate.

For another, high net-worth divorces can sometimes bring up privacy considerations due to the parties' high profile. Given the complexity and cost of high-asset divorces, it is recommended to seek sound legal advice from a professional Wisconsin divorce attorney who can review some of the unique expenses associated with high-net-worth divorces.

Asset Valuation and Division

If the old adage "more money, more problems" is applicable to any situation, it is to high net-worth divorces. Specifically, the number, uniqueness, and value of assets in these types of divorces can make the process of evaluating them more involved and costly. The same goes for determining how these expensive assets should be divided; getting both spouses to agree to a property division settlement or persuading a court to divide the assets in a certain way can be a time-consuming and emotionally taxing process.

Some assets that may be at stake in a high net-worth divorce include:

• Real estate

• Stock market investments

• Rare coins

• Art

• Intellectual property

• Rare and collectible vehicles

• Airplanes

• Ownership in businesses

• Stock options

• Retirement accounts

• Overseas assets

• Pensions

Figuring out the value of these assets and the best way to divide them between the parties can be complex and require the assistance of experts who charge significant fees.

Expert Fees

High net worth divorces will have assets at stake whose division has the potential to impact each spouse's future for many years to come. The difficulty and complexity of dividing these assets can sometimes lead to accusations that one spouse is hiding assets, or that the assets are not being fairly distributed. To minimize these concerns, individuals in a high net worth divorce usually hire financial analysts or forensic accountants to bring to light the true value of the assets. Likewise, there may be tax implications that arise with the division of significant assets that can benefit from the use of taxation experts.

These financial specialists often have particular knowledge and training. For example, a Certified Divorce Financial Analyst (CDFA) can provide objective advice on budgeting, dividing assets, alimony, and property division. A CDFA will assess the parties' assets, liabilities, and future income capabilities to determine a fair outcome. Likewise, a specialist in valuing unusual assets like cryptocurrency or intellectual property can determine the value of these assets and make recommendations about whether to sell the assets and divide their value, or assign them to one spouse in exchange for other assets of similar value.

Lifestyle Maintenance/Alimony Settlements

In Wisconsin, state law does not automatically grant alimony or "lifestyle maintenance," but courts will instead consider several factors, including:

• The length of the marriage

• The age and health of the parties

• The division of property between the parties

• The educational level of each party at the time of the marriage and the divorce

• The parties' earning capacity

• How feasible it is that each party is likely to have a similar standard of living as they enjoyed during their marriage

• Any pre- or post-nuptial agreements about financial matters between the parties

• One party's contribution to the education of the other

Given the lifestyle to which high net worth spouses may be accustomed, the issue of how much lifestyle maintenance or alimony a party will be entitled to is likely to be disputed, with both parties trying to show that each of above factors weighs in their favor.

Courts prefer spouses to come to a maintenance agreement on their own wherever possible.

Child Custody

Courts will consider the best interests of the child in child custody matters. In high-asset divorce cases, that will include a relationship with both parents, financial stability, and, whenever possible, the ability for the children to remain at or near the lifestyle to which they were accustomed prior to the divorce. Additionally, the lifestyles involved in high net-worth divorces, including multiple homes, extracurricular activities, and travel schedules, can complicate child custody considerations.

A court may undertake the services of a custody evaluator who can evaluate all the varying factors at play and make a recommendation that takes into account state law. The parties may also wish to hire therapists or divorce coaches to assist the children during the difficult divorce process.

Privacy Issues

In high-net-worth divorces, concerns about safeguarding privacy may be that much more important. High net worth divorces can open up the parties to the prying eyes of curious members of the public, especially if one or both spouses are prominent people.

Additionally, given the high value of the assets, there may be more motivation for the spouses themselves to seek private information to which they would not normally have access in order to bolster their case.

To mitigate these issues, the divorcing parties may wish to put in place a number of privacy protections including:

• Confidentiality agreements with the individuals involved in the proceedings (accountants, divorce coaches, financial advisors, and so on).

• Media management and public relations teams to manage the message the public gets about the divorce.

• Family divorce coaches to help break the news to children, parents, and other family members, and to structure the discussion about the situation in the most favorable light possible.

Litigation and Alternative Dispute Resolution

With so many valuable assets at stake, the likelihood that the divorce proceedings will be more contentious is high, even with legal agreements like a prenuptial agreement already in place. The resulting court battles may be lengthy and costly. Even if the parties agree to divorce amicably, mediation and collaborative divorce methods incur costs as well.

Divorces that start off amicable do not always remain that way, and it can be surprisingly difficult to maintain a neutral approach when there are strong disagreements over issues like finances and child custody.

If you are considering a high net worth divorce, understand that there are many different directions the process could go. The best way to protect yourself and your financial interests is to hire an outstanding divorce attorney who will fight for you and ensure you secure a favorable divorce settlement.

Contact Our Milwaukee, WI High Net Worth Divorce Attorneys

When parties seek a high net worth divorce, the costs and considerations get that much more complex and expensive. An experienced Milwaukee, WI high-asset divorce attorney can provide legal advice to minimize the costs and protect your assets and lifestyle. At Gimbel, Reilly, Guerin & Brown, LLP, our team has the discretion and experience to work with high net worth divorces and we always treat our clients' cases with the attention and sensitivity they deserve. Call us to discuss your concerns at 414-271-1440today.

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