What constitutes a divorce with high net worth? What effects do substantial assets have during divorce? There may be a wide range of definitions or standards for a high asset divorce. A million dollars’ worth of assets could include a half-million-dollar marital residence, a quarter-million-dollar 401(k), and other assets that add up to that amount.
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High asset levels have an impact on the methods and procedures you must use to value assets, ascertain ownership, compute the liabilities incurred to acquire the assets, and develop a framework for valuing net worth. Due to the enormous value of assets, these problems will arise. Your attorney has to know about these significant assets so they can advise you on how to approach future property assessment and division.
High Asset Is Not Really Referring To Cash
High asset divorce: what is it? High asset divorce is a phrase that can be misleading. It refers to owning any marital property with a high valuation rather than the amount of money you have in your bank accounts. A divorce involving numerous high net worth assets, such as numerous homes, business assets, or diverse financial holdings, is common.
Cash is part of assets. In fact, it is the most liquid of most assets. A marriage however can have a very high net worth without necessarily having a large amount of cash. This is probably because of the high cost of living or the accumulation of large amounts of debt.
When one partner in the marriage fails to achieve the same financial success and standing as their spouse, a high asset divorce typically happens. This may be due to a variety of factors, including inheritance, investments, enterprises, and more. In Michigan and other states, requesting a divorce jumpstarts a legal process leading to the discovery of these assets.
When this happens frequently, disputes about who should receive what property and what constitutes a fair allocation of property result.
Many extremely wealthy people spend their entire lives building their fortune. Given the amount of cash that was amassed during the marriage, filing for divorce may not be simple for them.
Hiding and Seeking Assets During Divorce
Some people will do whatever to avoid discussing the amount of assets they have during divorce and start finding ways to conceal them. People might, for instance, provide money or property to family members or hide it in different sneaky methods.
These efforts to conceal assets are frequently exposed, which damages your credibility with the judge. For instance, in Michigan, if it is revealed throughout the divorce process that you have hidden assets from your spouse, you could lose 100% of those assets.
While Michigan courts will carefully review high asset divorce cases to ensure a fair settlement, a couple can take certain measures to protect their finances prior to a final ruling. You can try sifting through what assets are separate and what are marital assets.
There should be a logical process for doing an inventory of separate and marital assets. You have assets you have acquired prior to marriage. Assets that one spouse brought into the marriage or those that were inherited during the marriage are exceptions to the equitable asset allocation rule. These resources can be classified as personal or separate property and hence not subject to equal sharing.
It is best not to be moving or disposing of assets at this time.
There are some things that should never be done in high asset divorces. For instance, altering the beneficiary information for an account or spending a lot of money quickly could have unfavorable effects. Maintain standard transaction levels to make navigating the procedure much easier.
Before getting a divorce, avoid trying to sell a second home or changing the ownership of any assets significantly. This just complicates the situation and fuels disputes between the parties.
Selling the house and dividing the proceeds equally is the simplest way to handle asset division. If you wish to keep the house, you can pay your spouse what their share of the property is worth, but you should first carefully estimate its value.
Prenuptial Agreements Aren’t Ironclad in Michigan
A prenuptial agreement, which specifies the assets and alimony the other spouse will receive in a divorce, is a widespread practice. It seems simple enough, but in order to eliminate any potential problems, it is crucial to have an attorney carefully evaluate the agreement.
Prenuptial agreements are enforceable in Michigan if they are reasonable, fair, and equitable. Both parties must have voluntarily entered into the agreement for it to be enforceable.
Both parties must have legal counsel who can attest to the agreement’s legitimacy in the case of a legal dispute in order for the agreement to be upheld by the courts. This can occasionally be a source of conflict in high net worth divorces.
Sometimes the higher-earning spouse hires an attorney to design the agreement, leaving the other side unrepresented when they sign, which can be problematic if there is ever a disagreement.
The general public has to be aware of one very crucial fact regarding prenuptial agreements. Prenuptial agreements are not set in stone in Michigan. The courts in Michigan will always make an effort to ensure that their decisions are in line with the wishes of the parties.
The legitimacy of a prenuptial agreement is always left up to the court’s discretion, which it will always exercise fairly. A prenuptial agreement that is fully legal may be declared unfair by the court in several situations. It may therefore enter the property covered by the prenuptial agreement.
A prenuptial agreement, also known as an “antenuptial agreement” in Michigan, is a document enabling future spouses to stipulate how particular issues, such property distribution and alimony, will be resolved in the event of a divorce.
If the situation has changed to the point where it would be unfair to enforce the agreement, the court may decide to reject it. The agreement is not unenforceable just because it gives one spouse a considerably larger share of the marital estate.
Even though the prenuptial agreement forbids it, the court may order the other spouse to pay alimony in the event, for instance, that one spouse got disabled during the marriage and is no longer able to work. Typically, a judge must discover that type of severe situation in order to declare an agreement unenforceable owing to unfairness.
A prenuptial agreement will only be upheld by a court after a marriage has been declared null and void if it is required to prevent injustice.
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