High Net Worth Divorce: Everything You Need to Know

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By Divorce & Finance

While each divorce case is unique and carries its own emotional and financial hurdles, high net worth divorce tends to bring more complications to the table.

A high-net-worth divorce usually involves challenges related to the valuation and distribution of assets. Thus, spouses must consider many factors during their separation, including martial properties to mutual funds, retirement accounts, jewelry, art, and more.

This article will clarify the concept of a high net worth divorce and how a person can protect his financial and emotional stability after a divorce.

What is considered a high net worth divorce?

High net worth divorceThere is no single definition for high net worth divorces. However, its traditional meaning defines it as a divorce involving more than one million dollars in net liquid assets. Today, many divorces include significantly higher amounts.

How is a high net worth divorce different from others?

More assets mean there is more to divide. The difference between a high-net-worth couple and other couples is their assets.

Although they might differ from one married couple to another, assets commonly owned include one or more of the following:

  • Real estate holdings
  • Investments
  • Retirement accounts
  • Businesses and Partnerships
  • Exceptional assets such as art and jewelry

In terms of asset division during a divorce, the courts usually divide properties under two basic schemes: community property or equitable distributions.

In states following the community property scheme, the court will distribute shared assets equally during a divorce. While in other states following the fair distribution scheme, the court will distribute assets equitably but not equally. Nevertheless, parties could negotiate to change the agreement.

During high net worth divorces, negotiation stakes are much higher since one percent of shares may be equal to tens of thousands of dollars. For example, when dealing with an estate worth $20M, each additional percent is $200,000, making the understanding of finance, accounting, and business valuations critical.


A unique concern regarding the social elite is that their high net worth divorces tend to catch the public’s eye. Reporters and journalists can easily share anything going on in the lives of celebrities, famous philanthropists, and other known community members.

Publicity of high net worth divorceJournalists may take advantage of those “famous” separations to bring exclusive scoops to their readers. A family law attorney can help minimize unwanted attention by implementing techniques to ensure privacy, such as getting gag orders, divorce mediation, or sealed court proceedings.

Prenuptial Agreements and Their Effect on High Net Worth Divorce

Prenuptial agreements are private contracts that a couple of signs before marriage to set the division of assets in case of death or divorce. Such agreements are more common among high-net-worth unions since these people have more to lose.

Prenuptial agreements can help reduce the complications involving finances and protect assets while ensuring both spouses’ financial security. In a case of a high asset divorce, a legitimate prenuptial agreement can determine property division, spousal support, alimony, and so on. However, the two parties cannot include in the contract anything about child support or child custody in the event of the divorce.

Signing a prenuptial agreement does not make it automatically valid and legally binding.

Some of the reasons that may invalidate the agreement include the following:

  • Proving that one of the parties forced their spouse into signing
  • Discovering that the party with more considerable assets did not fully disclose their assets in an attempt to hide them.
  • Signing because of coercion or fraud makes the agreement unenforceable.

Alimony in High Net Worth Divorces

Alimony in high net worth divorcesWhen both spouses make considerable earnings, it might be unnecessary to address the issue of alimony, also known as spousal support, in a high-income case.

However, when one spouse is dependent on a supporting spouse, alimony becomes essential.

In general, a court takes into consideration several factors before deciding the spousal support. These factors include the parties’ financial needs, the accustomed standards of living, the employment incomes, other recurring earnings, separate and marital debts, and the reasonably necessary expenses to support each party.

However, when divorcing a rich husband or wife, it becomes the court’s job to determine the amount, duration, and the method of payment of the alimony while considering additional relevant factors such as:

  • Spousal misconduct during the marriage
  • Earnings or incomes
  • Properties brought into a marriage.
  • Physical, emotional, and mental health of the spouses
  • Standards of living
  • Duration of marriage
  • Educational levels
  • Tax consequences

Child support in High-Net-Worth Cases

Unlike alimony, the couple will need to complete some obligatory guidelines or worksheets to calculate the final amount that a spouse should pay for child support. Each state has its formula for amount calculation. In all cases, the most significant factor that determines the number is the parent’s earnings.

For example, in a million-dollar divorce case, there are child-related expenses you don’t usually see in other divorce cases. Children in wealthy families are typically used to living a high standard of living. Their parents enroll them in private or boarding schools; they practice competitive and expensive sporting activities. They may already have trusts set up in their names.

These trusts are usually used to pass down family inheritances and sometimes to protect properties. This situation can also lead to more complexity within a divorce. That’s because courts treat revocable and irrevocable trust differently.

Protecting Financial and Emotional Stability After the Divorce

Man thinking about his financial and emotional stability after the divorceAnyone passing through a divorce might feel at risk of losing everything they have worked for so hard. Whether it is an investment property, a business, or retirement savings, a person will feel the urge to protect their belongings.

In addition to the financial importance of assets, a spouse might have an emotional and personal connection to something that does not mean anything to the other partner. Suppose a spouse does not want to sell the family home for sentimental reasons. In that case, the other spouse will need to compensate for the equity and protect themselves regarding the balance remaining on the mortgage.

The distribution of physical assets between the partners might be challenging. The court evaluates each item’s financial and emotional value closely before being adequately distributed among the two. Of course, the spouses should be willing to compromise on some things.

With the help of experienced lawyers who can act as negotiators and mediators, a couple might find solutions to these sensitive details without taking matters to costly litigation.

Tips to Follow During a High Net Worth Divorce

  1. Seek Professional Advice Promptly. In high-net-worth marriages, usually, one spouse is more financially educated than the other. If you suspect your partner is divorcing you or you are considering divorcing your partner, contact a lawyer quickly. Do this preferably even before you receive the divorce papers. A skilled high net worth divorce attorney will most probably refer you to a forensic consultant, a person who can examine, gather, and follow a couple’s financial activities. It is crucial to have complete knowledge of all your financial affairs. Your partner may not necessarily be hiding anything from you. Still, it is best to enter the battle armed with as much information as possible.
  2. Power Through. High asset divorces tend to take longer to solve due to their complexity. The process can be stressful and emotionally tiring. You may feel tempted to settle quickly to get it over with, which might hurt your financial future. Similarly, trying to punish your spouse and trying to make them pay will not benefit you in the long run either. As harsh as this may sound, you should treat divorce like termination of a business. You should negotiate, consider, and evaluate the short and long-term implications of all settlement options. Evaluate everything with your divorce lawyer, tax advisor, real estate broker, financial planner, and other professionals.
  3. Think Beyond Liquid Assets and Physical Properties. Do not limit your thinking to money and properties, but try to equally think about child support, spouse support, tax consequences, and forthcoming tuitions. Your lawyer, financial planner, and tax advisor can help you understand every detail, draft your financial declaration, and explain what to expect in the future in terms of finances.
  4. Do not Shuffle, Devalue or Hide Your Assets. The first thing that you need to do at the beginning of the process is to compile a list of assets. In today’s world, you can’t hide anything from the law, so don’t try to lie or hide. If someone tries to conceal the liabilities, the court will consider them unethical, which will destroy their credibility – a person’s greatest asset. Trust that the team you have chosen will do its best to protect your interests and fight to achieve the future you’ve pictured for yourself.
  5. Find a Compatible Lawyer. Remember that no two divorces are alike since laws, judges, and opposing counsels change. While starting with friends’ and families’ recommendations is not a bad idea, you should always trust your judgment when choosing lawyers and advisors. Lawyers previously recommended by your partner might not be the right fit for you. Building your legal team could be expensive, but the right team will undoubtedly help you avoid mistakes that might cost you more in the future. Your financial and personal future are both in the hands of your advisors and lawyers, so avoid shortcuts that might save you a few dollars and cost you more later on. The best lawyer is the one who fights for you till the end and knows which battles are worth fighting.


Woman holding money from high net worth divorce

  • High net worth divorces tend to be more complicated than other divorce cases due to the many assets involved.
  • If valid, prenuptial agreements may simplify asset distribution, but a good divorce lawyer will help protect the couple’s financial and emotional stability after the divorce.
  • High net worth divorces can be a personal challenge for celebrities and famous community members. Journalists take advantage of “famous” scandals to steal the attention of their readers.
  • High net divorces require a lot of effort from both parties. Never try to hide or lie about your assets, as it may turn against you.
  • Even though the process is emotionally tiring, try to focus equally on issues other than assets and money (i.e., child custody, child support, spousal support, upcoming tuitions, etc.)

Getting advice from people who went through a similar situation as yours is not a bad idea. However, remember that every divorce case is different.

Your financial and personal future all depend on your lawyer and financial advisors. For the best outcome, choose your team wisely and make sure they have your best interest at heart.

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Divorce & Finance