A high net worth divorce is not the same as other divorces. There are special issues to consider when one or both spouses owns substantial assets, and there are special rules that apply to spouses who earn significant income. Here are some of the important things to consider in high net worth divorce cases.
What is high-net-worth divorce?
A high net worth divorce is one where at least one of the spouses has more than $1 million in assets. Assets may include businesses, real estate holdings, retirement accounts, pensions, savings, trusts, stocks, and other financial investments.
Difference between high net worth divorce and other divorces
The general issues tend to be the same across all divorces: parenting, child support, spousal support and division of assets and debt. The key difference is that high net worth divorces require specialized legal knowledge to ensure a fair marital asset distribution and fair determination of support issues. The process of untangling finances and dividing assets is much more complicated than with other divorces.
High net worth divorce cases typically take longer to resolve and there is also a tendency for high net worth divorces to be more expensive. There are several reasons for this:
It takes time to properly identify, investigate and value the range of assets at stake.
In addition to a skilled divorce attorney, there is usually a need to hire other experts such as professional accountants, appraisers, business valuators, and tax advisors.
There is the potential for prolonged litigation when there is so much at stake.
In Valerie’s practice as a New Westminster family law lawyer, she is comfortable both inside and outside the courtroom. She regularly utilizes alternative methods of dispute resolution such as mediation to protect client privacy, to prevent matters from dragging on unnecessarily, and to resolve conflicts in an efficient and effective manner.
Top things to consider in a high-net worth divorce
There are a select number of British Columbia family lawyers with the level of experience
necessary to handle these types of cases. The first and most important thing to consider is
whether you have a family lawyer on your side whom you trust. Do you feel they will help you
make well informed decisions? Have they handled cases like yours before? If you have the right
legal representation, this will allow you to navigate your high net worth divorce with
confidence.
Beyond the choice of legal professional, here are some of the top considerations in high net
worth situations:
Full financial disclosure is crucial. Full financial disclosure from both spouses is essential in every divorce case. The need for timely, complete disclosure is heightened in high-net worth divorces. Documents produced in a high net worth divorce will typically be voluminous and complex. Things get even more complicated when one or both spouses is hiding assets or refusing to disclose financial records. You need an experienced family lawyer to analyze and to obtain relevant documents either by agreement or by court order.
Expertise will be needed to decipher documents and assess values. Corporate financial statements, income tax returns, shareholder agreements, trust deeds, pension statements, and bank records are just some of the documents that are typically produced in a high net worth divorce.
The family lawyer you choose to work with must know how to read these complex documents and they must be connected with a network of trusted valuation experts, appraisers and accountants who can be called on as needed to interpret financial documents, value assets or rebut valuations obtained by the other spouse.
The child support and spousal support rules do not apply in the same manner. The federal child support and spousal support guidelines are intended to provide consistency and predictability in divorce cases. However, they do not fully capture the complexities of a high net worth divorce. On one hand, BC family court judges recognize that high net worth spouses and their families become accustomed to a certain lifestyle. On the other hand, family courts judges are cautious of making child support or spousal support awards that amount to a transfer of wealth that exceeds the child or recipient spouse’s reasonable needs. British Columbia family court judges have more discretion in these cases and often deviate from the guidelines. The lack of predictability in high net worth divorces can be daunting. skilled divorce lawyer can draw on their experience to advise you on the range of expected outcomes and advocate for fair support on your behalf. There is considerable benefit to negotiating a fair out of court resolution of support issues in high net worth divorce cases thereby avoiding judicial discretion which can vary widely from case to case. Determining a high net worth individual’s true income for support purposes is challenging. For instance, a spouse’s income may be deceptively low on the surface due to undisclosed income, the particular corporate structure or the amount of dividends withdrawn. Conversely, the divorce itself could negatively impact one spouse’s earning potential mainly if they were previously involved in a family-owned business and can no longer participate. Division of property and debt may also need to be factored into the support equation, as it can impact one or both spouse’s income or income earning potential. In Valerie’s more than 30 years of practicing as a family lawyer, she has gained knowledge and experience to assess each spouse’s income. She is skilled at reading financial statements and income documents.
There are usually major tax implications in high net worth family cases. There are various ways that family property can be split. The way that property is divided can have very different—and very significant—tax consequences. There are ways to structure a property settlement to minimize tax liabilities for both spouses. There are also tax considerations when it comes to structuring the payment of spousal support (e.g., lump sum vs. periodic payments). Your divorce lawyer should be prepared to meticulously assess your assets, advocate to safeguard your wealth and business interests, and take all necessary steps to protect you from excessive taxation.
Trusted Legal Advice from an Experienced High Net Worth Divorce Lawyer
British Columbia residents trust Valerie M. Little to provide the support they need when navigating high net worth family law cases. You can trust Valerie M. Little to provide you with the support, legal information and strategic advice whether you wish to negotiate, litigate or mediate your family law case.
For more information about Valerie’s family law office or to schedule your own private consultation with a high net worth lawyer, call today. She is here to help. Valerie M. Little Law Corporation is a family law firm that is centrally located in New Westminster and serves the surrounding areas of Burnaby, Maple Ridge, Coquitlam, Port Coquitlam, Vancouver, North Vancouver, West Vancouver, Port Moody, Richmond, Surrey, Cloverdale, Delta, and Langley. For guidance and legal advice customized to your unique situation, you are encouraged to contact Valerie by email or telephone at 604-526-3333. Get the answers you need to move forward with your life. Let’s talk today.