It is difficult to divorce, especially if either spouse has valuable assets. Your divorce is considered a "high net value divorce" if you or your spouse have a sizeable amount of valuable assets.
In New York City, high net worth divorces can be extremely complicated and most often require a Manhattan High Asset Divorce Attorney for representation.
While certain items are not allowed to be divided, like belongings that were acquired prior to marriage, most property will be divided by the court according to New York's divorce laws. These broad categories cover most assets:
- Belongings acquired in marriage
- Automobiles, motorbikes, and other vehicles
- Real estate, vacation properties, and homes
- Bank accounts and financial assets
Particular Considerations for High Net Worth Divorces
High net worth divorces are technically the same as any other type of divorce. The only difference is the couple's wealth. High net worth divorces are more likely to be fraught with conflict because large amounts of money could be at stake. High net worth divorces tend to focus on division of marital property and assets. For couples without a prenuptial arrangement, this can be very time consuming.
Unique assets, such as businesses and financial securities, are subject to the same general rules for property division, their classifications and valuations can be significantly more complicated. Sometimes it is necessary and logical to hire specialists like appraisers or forensic accountants. This is especially true if an item's status as marital or separate property is at issue.
Although no divorce is without financial difficulties, high-net worth couples may find the legal process particularly difficult. Many areas require special attention, including the division of complex assets, business interests, and spousal support orders. There are five things to consider for couples going through high-asset divorce.
Spousal maintenance, also known as alimony, is a type of maintenance that can be awarded to a spouse if they earn significantly more than their partner. A judge will decide alimony based on factors like the length of the marriage, income gaps, specific contributions to the marriage and earning potential.
Evaluation of Prenuptial Agreements
Couples with a prenuptial and/or postnuptial agreement need to review its terms with an attorney. Even if your agreement appears to be in good shape, it is still worth reviewing. You may find that the best path forward may not be the one you chose in the past.
Classification of marital property
New York is known for being an "equitable division" state in divorce proceedings. All property that is deemed marital property (not separated) will be subject to equitable division, but not necessarily equally. A specialist may be needed to track the origin of assets that have been commingled extensively. It may also be difficult to classify certain assets, such as stock options.
Understanding the potential tax consequences
There may be tax implications if a process involves the division or transfer of property or financial assets. Talk to an attorney to determine the best way to minimize tax implications when negotiating a settlement.
Spousal Maintenance in New York
Spousal maintenance, in its most common form, is a payment from one spouse to another over a predetermined time period based on the terms of the divorce decree.
While most people believe payments are made after a marriage is over and the divorce is finalized, this is not always true for spousal maintenance. New York allows what is commonly called "temporary maintenance" (or what lawyers might call "alimony pendente lit").
While the couple is still married, temporary maintenance can be paid to one spouse. Each party will receive a portion of the marital income until a permanent alimony number can be agreed upon.
Any pendente-lite alimony is calculated using the NY temporary Maintenance Calculator. This is due to the recent New York alimony reform and can also be used to calculate alimony payments after a divorce is final.
Limitations in the Maintenance Calculator
The NYS alimony calculator in 2021 has $192,000 as its upper-income limit.
This means that even if one spouse earns substantially more than $192,000 per year in net income, the guideline calculation will only consider the earnings up to $192,000
New York permits divorcing spouses to alter the amount that the spousal maintenance calculator outputs, provided they can agree on an alternative amount.
After all the calculations and gyrations required to determine net income or upper income limits, you can bypass the results and reach a fair amount that you both agree is fair.
In New York, any income generated from investments, rental properties, etc. also counts as income in the alimony calculation. So, if you have income-producing assets like a mutual fund portfolio or rental property, until you determine which assets each of you is going to receive in the divorce, you can't settle on an alimony amount.
If you are facing a high net worth divorce, speak with a lawyer today.