One of the things that can complicate a divorce is dividing assets. In Illinois, property is separated into marital and separate property. Everything under the umbrella of “marital” is then split as equitably as possible between the spouses. However, this can be complicated with people of high net worth. Those of high net worth are typically considered individuals who have at least $1 million in liquid assets, meaning they can turn it into cash at a moment’s notice. Here are a few reasons high-asset divorces can be complex.
People with high net worth often have many investments. It can often be difficult for people to keep track of every single business venture that you supported financially. Often, people of high net worth use valuation specialists or forensic accountants to take full stock of the breadth and value of their entire portfolio, the value of their businesses, and other assets.
Prenuptial and Postnuptial Agreements
Often any agreements made on assets before the marriage took place or while the marriage was still ongoing need to be evaluated by attorneys. Sometimes ill-drafted agreements leave loopholes that your spouse’s lawyer can exploit. So, it is advisable to ensure the contracts haven’t left any of your assets unprotected.
Alimony (Spousal Support)
If you and your spouse have a similar income, it is unlikely either of you will require spousal support. However, if one spouse makes significantly less than the one with high net worth, the court may award the spouse with the smaller income some amount of alimony for a period of time.
In some cases, a spouse with high net worth may try and spend excessive amounts of money, particularly if it’s obvious the marriage is coming to an end. This spending is usually an effort to avoid giving a spouse more income or more share of the marital assets. However, this can often backfire. Courts will often punish spouses who waste marital funds by requiring them to provide their spouse with the equivalent of half of what they spent in excess. For example, if a spouse spends $20,000 wastefully, he or she will have to pay at least $10,000 back to his or her spouse.
High-asset divorces have a lot at stake. Some spouses might try to hide extra funds from the divorce proceedings in offshore accounts. This is illegal, however, and can be found out by hiring a forensic accountant to investigate a spouse’s financial records.
If there ends up being a transfer of assets during a divorce, it almost always involves tax consequences. You and your divorce attorney should collaborate with an accountant to ensure any assets transferred are taxed as little as possible.
The cost of a high-asset divorce will likely be high, mostly as a result of disagreements between the spouses and the investigation into any high net worth individual’s financial records. If you are a high net worth individual and you initiated the divorce, you might have to pay some amount of your spouse’s attorney’s fees.
To learn more about what to expect during a high-asset divorce, talk to one of our Illinois family law attorneys. At Wakenight & Associates, P.C., we understand how stressful divorce can be. Our lawyers try to make your experience as easy and stress-free as possible. Let us see what we can do for you.
Contact us by phone or fill out our online form to schedule your free case consultation today. We look forward to working with you.