What Is a High Net Worth Divorce?
No hard and fast rule definitively identifies what amount of assets constitute a high net worth divorce. Generally speaking, a couple with a high net worth is one with extensive assets and a more complicated financial situation. A couple with assets totaling $1,000,000 or more is commonly accepted as high net worth, depending on where you live.
Keep reading to learn more about some of the challenges faced during high net worth divorce cases.
Why Are High Net Worth Divorces More Complicated?
High net worth divorce cases can be more complicated than the average divorce in large part because of the more complex financial situation these couples find themselves in. In particular, property division becomes a major point of difficulty. This is largely because high net worth couples often have non-traditional assets that can be difficult to value and divide.
In addition to traditional assets like bank accounts, other assets often held by high net worth individuals include:
- Retirement accounts
- Investment accounts
- Stock options
- Business ownership or partnerships
- Real estate
Furthermore, many high-net-worth individuals have complicated marital agreements, including prenuptial agreements that must be dealt with (and in some cases defended) during the divorce process.
Property Division in Texas
Texas is a community property state. This means that all property acquired by either spouse during the marriage is considered jointly owned by the community/couple. Separate property is defined as property that one spouse owned prior to the marriage, that which was acquired during the marriage by way of gift, devise, or descent, and any property gained as recovery for a personal injury (minus any recovery gained for loss of income or earning capacity during the marriage). Community and separate property are defined by Texas Family Code Chapter 3, Subchapter A.
It’s important to note that just because Texas is a community property state does not mean that property division must be 50/50. When dividing property during a divorce, Texas Family Code Sec. 7.001. provides the following general rule: “the court shall order a division of the estate of the parties in a manner that the court deems just and right, having due regard for the rights of each party and any children of the marriage.” Under this statute, the courts also make decisions regarding retirement and employment benefits, and insurance.
How Your Attorney Can Help
As you go through your divorce, your lawyer is your greatest resource. Not only can an experienced attorney provide you with personalized legal representation focused on your particular needs, but they also have access to a wide range of resources to help you throughout the process. For example, should you decide to use the collaborative law method for your divorce, your attorney can help connect you with a wide range of trained professionals to help you settle your case, including child psychologists and financial advisors.
Should You Hire a Financial Advisor to Help with Your Divorce?
Knowing what professionals to rely on during your divorce can be challenging, and you may be wondering what a divorce financial advisor is. However, depending on your situation, you may find working with a professional trained in the financial aspects of going through a divorce beneficial, especially if you are going through a high net worth divorce.
When going through a divorce, it is important that you are working towards a mutually beneficial settlement and not one that is detrimental to your future financial stability. A financial advisor can help you deal with both the short and long-term impact of your divorce and potentially help you with some of the more difficult aspects of the property division process.
However, hiring a financial advisor to help with your divorce is not for everyone. You should consult with your attorney first to determine if this is something that could benefit you.