High Net Worth Divorce in NJ
Couples who have been fortunate enough to acquire significant wealth and assets during their marriage face complex issues that less fortunate parties may not during a divorce. High net worth divorces in NJ can be challenging for attorneys and accountants, often charged with valuing and collating records on things like foreign properties, bank accounts, or unusual assets like art or collectibles. Some of the issues that could be involved in a high net worth divorce in NJ are as follows:Real Estate
While the marital residence is an asset typically involved in divorces, a high net worth divorce in NJ might include several properties, such as a vacation home, investment properties – even commercial properties! Determining how the couple owns the property is crucial, so knowing when the property was purchased, whether it was done with marital funds or premarital funds, and any contributions to its improvement are critical in determining its division. Whether the parties can afford to keep it and maintain it after the divorce is a hard question that must be accurately answered before the final division.Business Interests
High net worth divorces in NJ often involve business owners. If it is a lucrative business, then it is likely that experts will need to be used to determine the fair market value of the business. Forensic accountants will review the business site, books, property (both real and business), client databased, and even goodwill. This can take several weeks and be costly, so it is important to anticipate costs of accurately evaluating the business. If the business was established before the marriage, there may also need to be a determination as to what, if any, value is part of the marital estate and subject to division. If there are external interests involved, such as stock investments, deferred compensation, or even public holdings, this can make the valuation more complex, too.Prenuptial or Postnuptial Agreements
With parties staying single for longer before marrying, it is becoming more common to have a prenuptial agreement or postnuptial agreement. These agreements outlining the characterization and division of property earned prior to or during the marriage. It is important to ensure that the agreement is drafted so that it is valid and binding, and that there are no erroneous provisions.
A valid prenuptial in New Jersey must be in writing and signed by each spouse. Spouses must engage in full disclosure of their assets and debts, otherwise the prenuptial could be deemed invalid. Couples might be tempted to use a generic template when crafting their prenuptial or postnuptial agreement to save time and money. However, this can be more costly in the end. If the parties do not agree on the interpretation of a clause, it can result in more complex and extensive litigation. If you decide to get an agreement dividing property in the event of a divorce, retaining a savvy and experienced attorney to draft it will save you a lot of headaches in the future.Child Support
For high net worth divorces in NJ, child support costs might exceed the typical expenses for children like food, daycare and school supplies. Children of wealthy families might be accustomed to expenses like private schools, extracurricular activities, and more extensive travel. Child support is calculated with the aid of New Jersey Child Support guidelines, but in a high net worth divorce in NJ, the guidelines only go so far. While they consider income, time spent with the children, and regular costs of having children, the guidelines only contemplate families with an income of $187,000.00.
Figuring out child support for families who earn far in excess of the guidelines requires a balancing test, using factors like the needs of the child, the standard of living under which the child is used to, age and health of the child, and the earning capacity of each parent. Parties should submit a detailed budget when drafting their Case Information Sheet, outlining the specific costs of raising the child to ensure the court orders in excess of guideline support.Alimony
The theory behind alimony is to allow both parties to enjoy a similar standard of living after a divorce. In most divorces, this is a difficult goal – but in a high net worth divorce in NJ, parties have more discretionary income and alimony is more commonly awarded. Alimony can be awarded either for a limited time, or indefinitely, and it is entirely within the judge’s discretion to determine how much should be paid. The judge relies on statutory factors, including the income and earning power of each spouse, child custody, lifestyle and needs based on age, and health, and the length of the marriage. Prenuptial agreements can be critical in determining whether and how long alimony is ordered in a divorce.Tax Exposure
In a high net worth divorce in NJ, the tax consequences of a divorce can be significant for individuals who earn a lot of money. Dividing up stock options, real estate equity, and retirement plans can impact each party’s tax obligations. An experienced family lawyer can give you general guidance, but it is important to seek out the advice of an accountant or a tax lawyer to help you figure out the most beneficial methods of dividing property and to help create a tax structure that will mitigate any tax exposure from the divorce.
If you believe you have a high net worth divorce in NJ, contact the law offices of Peter Van Aulen today for a free consultation, at 201-845-7400.