How to Prepare for a High-Asset Divorce

Wedding rings on money. Cost of wedding. Price of getting married background. Golden jewelry on banknote.

Deciding to leave a wealthy marriage isn’t easy, especially if you are not the primary wage earner or have substantial assets spread across different accounts. Knowing how to prepare for a high-asset divorce is essential to minimizing the financial impact of separation. Whether you are trying to protect family assets or your own standard of living, taking time to prepare can be key to achieving an equitable divorce settlement that meets all your family’s needs.

Prepare Your Financial Information

When families have substantial assets, it can be far more difficult to track and calculate the value of the marital estate. To combat this, you’ll want to begin preparing your financial information even before filing your complaint. This includes gathering

  • Tax returns (including W-2s, K-1s, 1099s, and all schedules for business income)
  • Bank account statements
  • Balance Sheets
  • Profit-and-Loss Statements
  • Personal Financial Statements
  • Operating Agreements
  • Employment Contracts
  • Life, health, and other insurance policy information
  • Retirement, pensions, and investment accounts
  • Mortgage and other secured loan balances
  • Credit card and other unsecured loan balances
  • Deeds for real properties (including the marital home, vacation homes, and investment properties)
  • Titles for all vehicles (including boats and recreational vehicles)
  • Estate Planning documents, particularly trusts

If you plan to leave the marital home, or have historically relied on your spouse’s income, it is also wise to work with your attorney and/or financial advisor to prepare a budget for you and your children’s care and support after the divorce. This should account for your income from any various sources, and include all the reasonable expenses needed to maintain a reasonable standard of living, like your child’s extracurricular expenses and subscriptions and memberships. This budget can help your attorney advocate in favor of spousal support or child support in extremely high income circumstances when the Michigan Child Support Formula may not be the best fit.

Consider Who to Tell, and How

Wealthy families often rely on their substantial reputation within their local community. Sometimes that reputation can be harmed if the details about your divorce come to light in unfavorable ways. And that can lead in some cases to financial instability. Before talking to anyone with whom you do not have a confidential, privileged relationship, such as your attorney, therapist, religious leader, accountant, and physician, discuss what to say and whom to talk with about your divorce. If your divorce is low-conflict, you may also want to discuss this disclosure with your spouse, to make sure you are both putting forward the same message.

At the top end of high net worth divorces, there may also be concerns about the publicity that divorce can bring to a family’s financial affairs. In those cases, it may not be enough to manage the announcement of your divorce. You may also need to consider out-of-court settlement options, such as collaborative divorce, mediation, or arbitration, to keep those details out of the public record, and the public eye.

Prepare for High Net Worth Divorce by Valuing Important Assets

Families with high net worth often own significant businesses, properties, vehicles, collections, and other assets that do not come with a readily obvious value. But Michigan family court judges need to know the value of the parties’ properties to make an equitable property distribution. You can help your attorney prepare for your high-asset divorce by doing the work to inventory, document, and establish the values for your family’s assets. Depending on the type of property involved, you may need to hire:

  • Business valuation experts to establish the value of business interests
  • Appraisers for real property
  • Forensic accountants to establish the parties’ incomes
  • Specialists who can establish the value of collections or specialty items

Shield Your Assets from Dissipation

One concern people often have in high-asset divorces is that one spouse may try to conceal or dissipate marital assets, rather than allow them to be divided by the Court. This is a mistake in a high-asset divorce, because if the judge believes the party is misleading the court, it can result in sanctions or even the forfeiture of the dissipated or concealed assets.

However, when it comes to dissipation, prevention is far more effective than trying to collect assets from the offending party after the fact. You and your attorney can take steps to ask the Michigan family court to enter status quo orders, mutual financial restraining orders, and take other protective actions to make it far harder for your spouse to hide, spend down, or transfer assets outside the marital estate.

Hire a Law Firm With Experience in High-Asset Divorces

The issues that come with a high-asset divorce can be complicated, sometimes involving substantial documentation and requiring financial understanding. To be frank, not every attorney (or their staff) is up to the task of managing a complex divorce. Hiring a law firm that doesn’t have experience in high-asset divorce cases can cause important details to fall through the cracks, or leave you facing unintended consequences. For example, if your attorney doesn’t know to look at the tax and cash-basis implications of your property settlement, your net property division could be far less than if your attorney properly addressed those issues during negotiation. To ensure you are fully prepared for a high-asset divorce, be certain to hire a law firm with experience in high-asset divorces involving complicated legal issues. Working with a fully staffed and skilled high-asset divorce law firm can be key to ensuring your settlement reflects your family’s true net worth.

The high-asset divorce lawyers at Nichols, Sacks, Slank, Sendelbach, Buiteweg & Solomon have handled hundreds of divorces since the firm was founded in 1994, including many highly complex matters and high-net-worth households. We will work with you to prepare for your high-asset divorce, and stay with you throughout the divorce process. Call 724-994-3000 to schedule a consultation with one of our experienced Michigan divorce attorneys to discuss your case.

Categories: High Asset Divorces