Divorce is complicated in any situation, regardless of the amount of property owned by the spouses and any issues of child custody that might arise. Divorce often becomes even more complex when there are substantial assets from the marriage, leading to a high net worth divorce. Michigan divorce law governs all divorces regardless of the value of the assets that need to be divided, but it is important for couples anticipating a high net worth divorce to learn more about the particular complications that may arise. The following are some of the most common issues in a high net worth divorce.
Properly Valuing Marital Assets
One of the biggest issues in any high net worth divorce is ensuring that all assets are properly valued. While accurate valuation is an important concern in any divorce, it can be a particularly significant issue in a high net worth divorce. For example, if your marital property includes valuable pieces of art that are difficult and complicated to value, it will be essential to work with a legal team that can ensure the pieces are assessed at a fair market value. Similarly, if you own a business (or multiple businesses) with your spouse, the valuation process can be difficult, and you will need to make sure that you have a team that can provide an accurate value for every aspect of the business, from tangible business property to intangible elements of the business like goodwill and client relationships.
Complications of Equitable Distribution Under Michigan Law
It is important to remember that, even in a high net worth divorce, the property is still divided between the spouses according to the theory of equitable distribution. Even if you own substantial assets together, any marital property will be divided in a way that the court considers to be fair to both parties. Like other divorces, marital property is subject to distribution. Accordingly, if you and your spouse own valuable property that you acquired prior to the marriage or as a gift during the marriage, it most likely will not be subject to distribution, but the court does not have the authority in certain situations to do otherwise.
Need for Full Financial Disclosure and the Problem of Hiding Assets
While full financial disclosure is important in each and every Michigan divorce, it is especially important in a high net worth divorce. Given the high value of much marital property in a high asset divorce, the consequences can be greater if one of the spouses attempts to hide property. It is important for both parties to provide a full and complete financial disclosure.
Tax Effects of Property Division in a High Asset Divorce
The tax effects of property division in any divorce are important to consider, but with particularly high-value property, the tax consequences can be more salient. Accordingly, both parties should speak with their divorce lawyers about the tax consequences associated with property distribution before agreeing to a property settlement.
Premarital Agreements can Affect Property Division
Just like in other divorces, a premarital agreement can affect property division in a high net worth divorce. If, for example, the parties already agreed to divide property in a particular way, the court is likely to uphold the terms of the premarital agreement as long as it is enforceable under Michigan law.
Contact a Divorce Lawyer in Michigan
If you are contemplating a high net worth divorce, you should work with an experienced divorce lawyer in Michigan. An advocate at our firm can talk with you today. Contact the Law Offices of Michael A. Robbins to learn more about our services.