The experienced team of attorneys at The Montanari Law Group, LLC has served many high asset divorce clients in Wanaque, Wayne, Hawthorne, Ringwood, Clifton, and surrounding places throughout Passaic County, Essex County, and Bergen County. Contact us online today or call our offices located in Little Falls, New Jersey at 973-233-4396 to schedule a free confidential initial consultation with one of our New Jersey divorce attorneys.
What distinguishes a high-net-worth divorce is the number of assets and their worth. For example, a couple that owns over a million dollars’ worth of liquid assets, meaning cash or those assets that can easily be turned into cash, are considered high net worth. It also includes those with various investments, like stocks, equity compensation through their business or employer, and stock options. They may have retirement accounts, like IRAs, pensions, and profit-sharing too. Affluent couples typically have business or professional practices and own boats, cars, vacation homes, collectibles, jewelry, and other valuable holdings.
No matter what the couple owns, however, the law in New Jersey is that they must divide all assets and debts accumulated during the marriage equitably. With so many assets held in various forms of liquidity and non-liquidity, that may not be easy. To complicate matters, assets that each of the couple owned prior to marriage is separate property unless they commingled the separate property with marital property. So, for instance, a wife who owned a house prior to marriage may change the property from her separate property to marital property by adding her husband’s name on the title to the property. And even if she kept the property in her name, her husband may still have an interest in the property if she used funds earned by either party during the marriage to improve the property and increase its value. In fact, the increase of separate property value during the marriage may give the non-owner spouse a financial interest in the separate property. Likewise, inheritances that are separate property by law may be commingled in a joint bank account for it to lose its separate property character.
The more complex issue after determining separate and marital property is valuing the property. While some assets are easily valued, like cash and bank accounts, others are quite complicated. Businesses, for example, require the expertise of a professional business valuation expert to arrive at the fair value of the business. Fair value encompasses many aspects of the business, not just the fair market value. For example, it matters what type of business entity one or both of the parties own, such as a corporation, sole proprietorship, partnership, or LLC. The interest each of the parties holds in the business and the marketability of the asset also comes into the equation, among other factors. Additional complications occur when one party owns a business that is cash-based and does not keep good records, so the value is hard to determine. And though it is never recommended, divorcing parties may hide assets. The law requires that both parties fully disclose all their assets and debts. Thus, when a marriage with complex finances and holdings is dissolved, a host of professionals are necessary to confirm and evaluate assets, such as business evaluators, forensic accountants, and real property appraisers.
Overall, dividing marital property in high-asset marriages is complicated, and if the parties must let a trial judge decide how their property is split, the judge will address the legal considerations used to make an equitable division. Some of those factors include the age, health, and income of the parties; lifestyle lived during the marriage; the separate property of each party; pre or postnuptial agreements; tax consequences; and contributions each made to appreciate the property, grow a business, or maintain the couple’s home and family life. Other considerations for trades and offsets, rather than a straight percentage split, is the liquidity of assets and the additional costs of splitting an asset. For example, a retirement or pension account may cost several thousand dollars to divide through a court-approved qualified domestic relations order. Rather than incur more costs, the parties can agree that the party who earned the retirement keeps it in exchange for a greater interest in an investment property or the family residence.
And finally, the final divorce decree must state what the parties decide about alimony. Typically, spousal support is based on one party’s need and the other party’s ability to pay. In the case of a high-asset marriage, the spousal support based on the paying party’s income and assets can be high. So, situations warranting support are commonly found when one party maintained the household while the other worked. At divorce, the non-working party’s lifestyle would change drastically compared to the living standard during the marriage without spousal support. For long-term marriages, typically longer than ten years, alimony may last for a long time or indefinitely. Sometimes one spouse needs alimony for as long as it takes to rehabilitate the party vocationally so that they may return to the working world and become self-supporting. And the couple’s property division may also affect the amount and length of support. Considering the householder who gave up a career, the judge may award more income-producing property to that spouse over the one who owns a professional practice or business.
Call our office in Passaic County to speak with a New Jersey divorce and asset division attorney experienced in high-net-worth divorces at The Montanari Law Group, LLC. We have extensive experience in this area and are prepared to assist you through all of the complexities of the process that lies ahead.
With local offices at one Lower Notch Road, Little Falls, New Jersey 07424 where we serve clients in all surrounding communities in towns such as Bloomingdale, Pompton Lakes, West Milford, Woodland Park, and Wayne.
Contact us today at 973-233-4396 to discuss your case with a high-net-worth divorce lawyer. Consultations are free of charge.