The Securities Exchange Commission has a concrete definition of a high net worth individual: any individual who, either on his or her own or with his or her spouse, has a net worth that exceeds $1,000,000 in liquid assets, an individual whose income exceeded $200,000 for the past two years and can reasonably expect it to exceed this amount in the next year, or any individual who, either alone or with a spouse, has made a household income of at least $300,000 for the past two years and can reasonably expect this income for the next year.
Divorcing individuals who are in this category are often advised to work with lawyers who specialize in high net worth divorces because they often have assets that other members of the population do not have and thus, need special consideration in the divorce process.
If you are a business owner or a partner in a professional practice, the business or practice may be considered to be marital property if you did not specifically exclude it from your marital estate in your prenuptial agreement. How the business’s annual income grew during your marriage and its current value are considered when dividing the business during a divorce. A professional business appraiser may be needed to accurately value your business, which can be done by examining its assets, its debts, and its potential for growth.
Valuing Investments Accurately
If you have a substantial investment portfolio, it is important that your investments are valued accurately so they can be distributed between you and your spouse equitably. This can include your brokerage account, offshore accounts, and any physical investments you have like a share in a company or a real estate property. An outside professional, such as a forensic accountant, may need to evaluate your assets in order to value them for your divorce. Risky investments can be difficult to value accurately because there is no way to tell how they will grow, if at all.
Determining the Tax Implications of your Property Transfers
After you transfer assets into singly-held accounts or have one partner take sole control of an asset in the property division process, each partner can find him- or herself facing a substantial tax obligation along with these assets. Speak with your accountant before you begin the property division process to get a sense of the tax obligations you could face after the divorce is finalized and once you begin, work with your lawyer to make choices that will not cause you or your former spouse to face an insurmountable tax obligation.
Work with an Experienced Winter Park Divorce Attorney
As an individual with a high net worth, you have concerns and needs that others do not have. Recognize these concerns and work with a Winter Park divorce lawyer who has experience working with high net worth individuals to ensure that all of your needs are met. Contact Sperling Ducker today to set up your initial consultation with our firm.