A high net worth divorce is one where one or both parties’ assets exceed their expenses and financial needs. The asset structure is often complex, and determining who is entitled to what can be a long and intricate process. 

What Makes a Divorce High Net Worth?

As a general rule, if a couple has a combined net worth of $1 million or more, they are considered a high-net-worth couple. High net-worth divorces deal with all the matters that normally relate to divorce cases – child custody, child support, division of assets, spousal support, etc., but they are more complex, as the more assets a couple has, the more difficult it can be to divide. 

What is Considered High Net Worth Divorce in California?

The $1 million minimum applies in California as it does elsewhere. It is important to note that it is not only the amount of wealth in question that makes a high-net-worth divorce complicated. It is not always easy to value assets in a case like this. They may include stocks, bonds, 401k, and real estate holdings. Determining the exact value of these things can be tricky. The services of expert appraisers and forensic accountants may be necessary to make an accurate determination.

How is Wealth Divided in High Net Worth Divorce?

There are several critical considerations that courts need to take into account when dividing wealth in these cases. These include:

  • Separate property: If either or both spouses owned assets, such as real estate, investment accounts, retirement accounts, etc., prior to the date of the marriage, these assets are considered “Separate Property,” and are typically not divided in the divorce. It is important to have records of the ownership and value of each asset prior to the marriage in order to best protect these assets through the divorce process. Separate Property can lose this classification if it is mixed with marital property.
  • The needs of each party: The financial needs of each party are calculated more generously than they would be in ordinary divorce cases, in proportion with the high living standards that high net-worth couples are able to enjoy. The needs are met from the matrimonial assets first. If this is not enough to meet all needs, non-matrimonial property is considered.
  • Valuing financial and property wealth: The total of all financial wealth, including bank accounts, pensions, investments, cash and equity funds, is taken into account when considering the division of assets. Property and land may be split between the two partners, even when only one partner contributed to the purchase.
  • Prenuptial agreements: Although these agreements are not legally binding, courts consider them carefully, because they state the partners’ proactive intentions regarding how assets should be divided in the event of divorce. The court will often uphold a prenup if it deems the terms to be fair and realistic. 
  • Hidden assets: it is not unusual for spouses to withhold financial information to gain an advantage during divorce proceedings. In some cases, independent forensic accountants can evaluate the assets to ensure fairness and transparency.

Why Hire a High Net Worth Divorce Lawyer?

Westover Law is a leading firm of family law attorneys in southern California. Our attorneys are here to assist with all family law matters in California. For help with high net-worth divorce in California, speak to a Certified Family Law Specialist at Westover Law.