High Net Worth Divorce
October 28, 2022|
In California, high net worth individuals undergoing divorce proceedings must consider a variety of circumstances during asset division. This includes, but is not limited to, evaluating all assets, determining spousal support, and if applicable, prenuptial agreements.
What Is a High Net Worth Divorce in California?
If one partner owns more than $1 million dollars in assets, the divorce is considered a high net worth divorce. High net worth divorces comprise of the same issues as most divorces, such as child custody, alimony, child and spousal support, etc. However, given the type of assets involved, high net worth divorces usually require forensic accountants and other experts working in tandem with attorneys to make all relevant determinations.
Temporary Versus Permanent Spousal Support
Typically, there is a fixed formula in California that determines temporary spousal support, based on the income of the two spouses. However, high net worth individuals usually do not have a W-2 to determine their income. Therefore, accounting and business experts are hired to analyze all income sources and accounts, including those in foreign countries, prior to determining the appropriate income.
The primary factor considered when making permanent spousal support will be income, therefore, it crucial that both partners hire reliable attorneys with the necessary resources to make sure income determination, asset evaluation, spousal support payments and payment collections are properly handled.
Certified Public Accountants (CPAs) who specialize in forensic accounting analyze and interpret evidence to give expert opinions and communicate findings in courtrooms. The role of a forensic accountant is especially important in high net worth divorces, and spouses who fear their ex-partners are attempting to hide assets may rely on forensic accounting to find all income sources. Alternatively, partners who believe their ex-spouse is not legally entitled to a certain asset, may use a forensic accountant to help prove their claim.
The Role of Prenuptial Agreements
Prenuptial agreements, commonly known as “prenups”, are written contracts created by two partners prior to their marriage. It details the division of assets upon a potential divorce and acts like an insurance in case of expensive assets. It is essential individuals considering signing a prenuptial agreement contact an experienced attorney to help draft a fair agreement free of loopholes and gray areas to best secure your assets in the long run.
Couples who married without signing a prenuptial agreement may sign a postnuptial agreement. Postnuptial agreements function similarly to prenups, detailing how a couple’s assets be divided in the case of a divorce however can be drafted and signed after a couple is married.
Contacting An Experienced Attorney
The experienced attorneys at Chugh, LLP have handled cases involving several high net-worth individuals, including several Fortune 500 companies. We have the knowledge and resources necessary to guide you through your divorce proceedings and prenuptial agreement drafting. Contact us today to set up a consultation.
Banks, Rick D. “Understanding High Net Worth Divorces in California.” Hg.org
Coventry, Anne W, and Natalie M Perry. “What Is a Prenuptial Agreement?” The American College of Trust and Estate Counsel
“Forensic Accounting.” AICPA
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