High Net Worth Divorce Attorneys in Garden City, NY
Although any divorce has the potential to be emotionally and financially challenging, not to mention filled with stress, a high net worth divorce tends to bring even greater challenges, therefore greater stress. As if marriage weren’t tough enough, according to CNBC, the more a couple earns, the more trouble the marriage can realistically expect. Many people have heard that money can be a cause of stress in a relationship; CNBC reported on a survey done by SunTrust Bank, which found that 35 percent of people named financial issues as the primary cause of trouble in their marriage. Just as interesting, the survey also found that the greater the mismatch between a couple’s credit scores, the more likely they are to separate during the first five years of marriage.
Divorces that involve couples with a combined worth of a million dollars or more are considered high net worth divorces. While these divorces will address the same marital issues as other divorces (asset division, child custody, spousal maintenance, and child support), it is imperative that those going through a high net worth divorce have a divorce attorney in their corner who has significant levels of experience with this specific type of divorce. A divorce attorney who does not have the depth of experience necessary to effectively represent a high net worth individual could cause that individual even more stress. The Law Office of Katherine Ryan, P.C., can provide the caliber of services high net worth clients need during unsettled times. We have compassion for our clients’ current situation, a high level of experience, and a reputation for success.
Wealthy Couples Do Not Necessarily Fare Better in a Divorce
While it could be assumed that a wealthy couple will naturally fare better in a divorce, it is important to know that couples with significant levels of wealth usually also have significant monthly expenses. In other words, a high net worth couple could be just as strapped for cash as those with lower incomes. Many couples who earn more than $1 million per year still do not have a 401(k) retirement account or anything to speak of in a savings account.
These couples are likely to maintain a much more expensive lifestyle, and in many instances, when one spouse is making high levels of income, the other may not be in the workplace at all, creating an underlying economic disparity. This is not to say the other spouse is not working—he or she may be the spouse who takes care of the children and runs the household. Further, while gender roles have dramatically changed over the past few decades, many couples still adhere to a “traditional” division of labor, which has the men taking the lead on finances. This adds yet another issue in a high-net-worth divorce when one spouse has no idea about the couple’s finances.
Dividing Marital Assets in a High Net Worth Divorce
The state of New York is an equitable division state, as opposed to a community property state. Under equitable division rules, a couple’s assets will be dived fairly—although not necessarily right down the middle. In community property states, marital assets are divided 50/50, across the board, however, there are currently only nine states that still follow community property laws. Most high net worth divorces have a variety of assets to deal with, including real estate, retirement accounts, business interests, savings and checking accounts, cash, personal property, and investments. In the same vein, most high net worth divorces also have debt to divide.
Like all divorces, consideration is given to marital vs. non-marital assets; non-marital assets are those which were owned by one spouse prior to the marriage (assuming there was no commingling of the assets during the marriage). Marital assets are those accumulated by the couple during their marriage. If the couple is unable to come to a mutually agreed-upon asset division, the court will divide the assets for them, factoring in the length of the marriage, the mental and physical health of both parties, the employability of each spouse, the individual income sources and debt, and any non-marital property owned by each spouse.
What About Hidden Assets in a High Net Worth Divorce?
Although one spouse may hide assets in any divorce, it is much more likely to occur in a high net worth divorce. An individual who suspects his or her spouse is hiding assets should first inform their divorce attorney, who will use every legal means possible to ensure an equitable split. In the event of offshore assets, hidden under the ruse of a separate business, or assets held under a friend or relative’s name, it could be necessary to bring in forensic accountants, to locate the assets and have them valuated.
How a Prenuptial Agreement Can Impact a High Net Worth Divorce
While a prenuptial agreement is specifically designed to help couples avoid chaos and contentiousness in the event of a divorce, in the state of New York, a prenuptial agreement may not be the ironclad contract most people would assume. New York is one of the few states which has not adopted the Uniform Prenuptial Agreement Act (UPAA) and has its own set of rules and laws concerning prenuptial agreements. A New York prenuptial agreement can cover one or more of the following:
- How property will be dealt with in the event of a divorce, addressing both marital and non-marital properties;
- How assets and debts will be divided in the event of a divorce or the death of one spouse;
- The right of each spouse to buy, sell, lease or transfer properties;
- Each spouse’s rights as far as managing a family business;
- Whether either party would be entitled to spousal maintenance in the event of a divorce;
- The rights of each spouse to death benefits from life insurance policies;
- Specific state laws which govern all of the above, and
- Certain other issues the couple wants to address.
In New York, you generally cannot predetermine issues related to children, including child support and custody with a prenuptial agreement.
Child Custody and Child Support Decisions in a High Net Worth Divorce
Emotions tend to run particularly high when discussing child custody issues during a divorce, and a high net worth divorce is no different. Although the best interests of the child should be the most important issue in a divorce, child custody in a high net worth divorce can be even more complex, as the “traditional” income-based calculations used in middle and lower net worth cases may require modification, and the courts may apply somewhat different reasoning. In addition to the “normal” issues associated with child custody and child support, private school education, expensive hobbies or extracurricular activities, health and dental care, childcare services (including nannies and au pairs), and college tuition may be added into the mix. This can result in even more child custody and support issues associated with a high net worth divorce, and, potentially, more decisions for the judge to make.
Is Spousal Maintenance an Issue in a High Net Worth Divorce?
Relatively new legislation in New York calculates both temporary and final spousal maintenance using the same formula for both, up to a combined income of $184,000. On income exceeding that $184,000, the court has the authority to calculate spousal maintenance. Determining and handling income above the cap as far as spousal maintenance is concerned is where a New York lawyer’s skills and abilities may really come into play in a New York high net worth divorce.
The factors for determining spousal maintenance are similar for a “normal” divorce and a high net worth divorce: length of the marriage, health, and age of each spouse, the present and future earning capacity of each spouse, any necessary training and education expenses, reduced or lost earning capacity, whether there are minor children of the marriage, and which parent will have primary custody, the tax consequences for each spouse, the standard of living established during the marriage, and any other factors the court determines relative. As one might imagine, the “standard of living established during the marriage” could have a particular impact on a high net worth divorce.
How The Law Office of Katherine Ryan, P.C., Can Help in Your High Net Worth Divorce
There are a number of potential conflicts in a high net worth divorce that might not be present in a lower income divorce. The Law Office of Katherine Ryan, P.C., is ready to help clients through their high net worth divorce. With a deep understanding of all the relevant issues in a high net worth divorce, Attorney Katherine Ryan is both a highly skilled negotiator, as well as an aggressive litigator, when the situation warrants. The attorneys at The Law Office of Katherine Ryan, P.C., can help those going through a high net worth divorce, or with any other issue related to family law, bringing significant experience, knowledge, and compassion for your current situation to the table. Katherine Ryan represents clients in Garden City, Stewart Manor, New Hyde Park, Mineola, Huntington, Melville, Woodbury, Commack, Smithtown, Syosset, Jericho, Roslyn, and Manhasset. Contact The Law Office of Katherine Ryan, P.C. today.