Considerations in a High-Net-Worth Divorce
According to the CDC, the divorce rate in Tennessee in 2021 was 3.3 per 1,000 inhabitants of the state. Divorce can be complicated at the best of times, but the process can become even more complex if one or both spouses in a divorcing couple has a high net worth. If you’re thinking of pursuing a divorce in Tennessee, contact me at the Law Offices of Fisher Wise in Chattanooga for representation.
Dividing Assets in Tennessee
Tennessee is an equitable distribution state, meaning that the court will strive to reach an “equitable” (not equal) solution for dividing assets between a divorcing couple. Factors such as the length of the marriage and each spouse’s earning power and skills play a role in the decisions.
In most cases, only marital (not separate) property is divided during divorce. Marital property is property (such as earnings and real estate) obtained during the marriage. Anything that one spouse obtained before the marriage is usually separate property. Inheritances and gifts received by one spouse during the marriage also usually count as separate property.
Some high-net-worth couples sign prenuptial agreements (or prenups) to determine how to divide assets during divorce. Prenups can legally designate some property as separate, secure assets for children, and determine spousal and child support. Prenups can be useful in preventing legal battles down the line.
Prenups can be invalidated if one person was forced to sign or if one person was hiding assets at the time of the signing.
Asset Issues in High-Net-Worth Divorces
Either member of a high-net-worth couple may own a large amount of property. This means that identifying all assets may be tricky.
Assets can include large primary residences, vacation homes, and other real estate, as well as vehicles, jewelry, art, and antiques. It is important to work with an attorney to collate all documents and financial records relating to this property and determine its value.
Couples in high-net-worth divorces often have many business interests and various investments. You should work with a professional evaluator as well as your attorney to obtain an accurate value for these business interests. You should also locate and obtain an appraisal for any investment accounts and stock portfolios.
Members of high-net-worth couples often have property, investments, and businesses across the globe. It is important to obtain a valuation of these international assets as tax issues may arise while dividing them in a divorce.
Spousal Support/Child Support and Custody
Spousal support may be determined by a prenup, but if not, the court will decide the amount of alimony and who must pay it based on the “equitable distribution” principle. However, this can be cause for disagreement.
For example, one spouse may have sacrificed work and education opportunities in order for the other spouse to start a successful business, leaving the less-wealthy spouse with diminished earning power; the spouse with the higher net worth might argue that the less-wealthy spouse has not “earned” the spousal support that the wealthier spouse may now be ordered to pay.
Having a skilled attorney on your side to represent you in such arguments can increase your chances of receiving a fair settlement.
High-net-worth couples often invest heavily in their children’s educations and move between residences throughout the year, so concerns about private school tuition and fees may form part of the negotiations, as well as managing complex visitation schedules.
Unfortunately, some members of high-net-worth couples attempt to hide assets from each other during their divorce cases. If you suspect that your spouse is hiding assets from you, you should hire a forensic accountant to examine your spouse’s business interests and other assets so that you can present the court with a clearer picture of the situation.
Publicity During Divorce
Another unsavory aspect of many high-net-worth divorces is their attractiveness to the press. The publicity may be harmful to your mental health as well as the well-being of any children. An attorney will be able to help you pursue remedies for this situation, such as gag orders or a sealed courtroom.
Duration of Divorce Proceedings
Due to the amount and value of assets involved, as well as any combination of the above issues, high-net-worth divorces also may take longer to resolve and involve higher fees than standard divorces.
In order to streamline the process, be sure to hire an experienced family law attorney. They can help you to gather evidence, represent you during heated court proceedings, communicate with forensic accountants and evaluators, and support you throughout the entire process.
Informing You of Your Rights
If you are thinking of pursuing or are involved in a high-asset divorce in Tennessee, turn to me at the Law Offices of Fisher Wise, serving Chattanooga and all surrounding counties, including Marion County, Rhea County, and Sequatchie County. I am ready to guide you through your high-asset divorce proceedings, helping you to make the best decisions for you and your family. Reach out today for a consultation.