Married couples with a high net worth face a unique set of challenges when it comes to divorce since there are usually more — and more complex — assets to divide and issues to negotiate. As a family law firm with attorneys who have experience with high net worth divorces, here are five issues that should be considered by divorcing couples with a high net worth:
Child support guidelines may not apply.
Presently, the New Jersey Child Support Guidelines apply to families with a combined net income of between $8,840/year ($170/week) and $187,200/year ($3,600/week). These guidelines do not apply to net Incomes that fall outside this range. Higher net worth individuals will need to either negotiate a child support arrangement or let a judge decide. Participating in mediation allows parents to control the decision-making process, which is usually more beneficial for all involved rather than leaving matters in the hands of the court.
Tax consequences need to be scrutinized.
Under current tax law, an ex-spouse paying alimony will no longer be able to deduct it from his or her federal income taxes. The ex-spouse who receives alimony will potentially benefit since he or she will no longer have to declare alimony as income and pay federal taxes on it. In short, this relatively new change in the federal tax law shifts the tax burden of alimony from the payee to the payor. State tax laws may also vary. In addition, high net worth couples may own real estate or conduct business in other countries. Usually, the process of divvying up these assets will require a thorough review of the potential tax consequences and an understanding of the laws of those countries when it comes to divorce and ownership issues.
Hiding assets is not unusual.
It is not unusual for one spouse in a high net worth divorce to conceal assets that disadvantage the other spouse when it comes to the amount of support being awarded. This behavior is illegal and could incur harsh penalties. A divorce attorney experienced in high net worth divorces can help identify hidden assets through the use of forensic accountants and other specialists.
Business ownership may be impacted.
A business started during a marriage is considered marital property, which means that it is owned by both spouses and will be divided if they divorce. If the business began before the marriage but grew substantially during the marriage, its appreciation in value is also considered marital property and will be treated as an asset in a divorce. You should look for an attorney who is experienced in the treatment of businesses in divorce and can help you navigate this complex process.
Your privacy may need protection.
Litigation in an open court becomes a matter of public record, so choosing private mediation or other alternatives to a trial will keep the details of your divorce out of the public eye. In New Jersey, divorce proceedings are open and accessible to the public. However, you may be able to ask the Court to seal all or part of your divorce records. While there is a strong presumption that affords the public to have access to court records, that is not an absolute. A motion can be filed pursuant to Rule 5:3-2(b) to demonstrate “good cause” to seal the whole file or part of the record. In addition, you and your spouse can agree to a mutual gag order that prevents either of you from making derogatory comments about each other to the press or on social media.
At Murphy & Cistaro, we are not only concerned with your divorce today but also with your quality of life long after your case is over. Your family law issues deserve to be managed with dignity and respect. You can prepare to civilly resolve your divorce, heal, and move on with your life with a legal team that has helped individuals all over New Jersey to heal and prosper. Contact us today for your free consultation.