THE REPRESENTATION YOU NEED IN ORDER TO PROTECT YOUR FAMILY
Here’s How Divorce Changes If it Is High Net Worth
Posted in High Net Worth Divorce on May 11, 2020
The divorce of any couple can be difficult and involve confusing laws and complex legal matters. The financial side of a divorce can be even more complicated, however, with a high net worth couple. More assets to divide and issues to contest make for lengthier divorce negotiations. High net worth couples are also more likely to argue over the details of a divorce, making for a more difficult case. Learning what to expect during your high net worth divorce could help you better prepare.
How Are Child Support Guidelines Changed in a High Net Worth Divorce?
In Colorado, the courts always give a couple the option of creating a parenting plan and child support agreement without a judge’s intervention first. If the couple can agree on a parenting plan, the judge will sign off and make it official if it protects the child’s best interests. If the couple cannot agree, the matter will go to trial. During a divorce trial, a judge may assess many different factors to determine a child support amount.
- Each parent’s respective financial resources
- The needs of the custodial parent
- The child’s physical and emotional condition
- The standard of living the child normally enjoyed
The child support amount in a high net worth divorce will most likely be higher than in a lower-income marriage. The children of a high net worth marriage will be used to a certain standard of living. Colorado Revised Statute 14-10-115 states that child support guidelines change for couples with more than $30,000 a month of combined incomes. At $30,000 or more, it will be up to a judge’s discretion how much child support to award. Under $30,000 in combined income, however, comes with child support amounts from $50 to $150 a month depending on the number of children.
How Do Prenuptial Agreements Affect High Net Worth Divorces?
Prenuptial agreements protect an individual’s assets in the event of a divorce. Prenuptial agreements are more common among high net worth marriages. Someone with a higher net worth may have more to lose, making it more important to have a prenup. A valid prenuptial agreement can determine matters in a divorce such as property division and alimony. It cannot, however, affect matters related to child custody or child support.
What Business Issues Might Arise in a High Net Worth Divorce?
A high net worth divorce could involve complex asset issues. The couple – or an individual spouse – might own a business, for example. During a divorce involving a jointly owned business, the courts may divide the interests in that business between both parties. Typically, a couple will need to enlist the services of a forensic accountant for a close review of business income, assets, stocks, debts and taxation. The courts might split the business 50/50 or divide it a different way depending on the situation.
Colorado’s equitable division laws will divide property in a divorce based on what is fair, not necessarily equal. In some cases, one spouse might decide to sell his or her portion of the company to the other spouse instead of continuing to share ownership post-divorce. In other cases, a spouse might choose a property settlement note. Both parties could also agree to sell the business and divide the sales price.
How Is Spousal Support Affected in High Net Worth Divorces?
If both parties in the marriage make substantial incomes, the courts might not approve a spousal support request. If, however, earnings in the marriage were unequal, the courts could award the lower-earning spouse alimony. Colorado will award spousal support by assessing the length of the marriage, how much both spouses earn, whether the lower-earning spouse gave up a career to raise a family and many other factors.
Spousal support in Colorado will typically equal 40% of the higher-earning spouse’s income minus 50% of the lower-earning spouse’s income. A couple that has been married less than 20 years and makes up to $240,000 in combined gross income will receive alimony for a period of time based on state law: 31% of the marriage starting at 36 months and increasing by 1.17% each month thereafter. If the combined incomes of the couple exceed $240,000, however, (or if they were married more than 20 years) this equation may not apply. A judge can award alimony indefinitely in a high asset case. Discuss all the complex aspects of your high net worth divorce with a lawyer.