King Law | Post-Divorce Financial Planning For High Net Worth Individuals: Securing Your Future

Post-Divorce Financial Planning For High Net Worth Individuals: Securing Your Future

  1. Family Law
  2. Divorce
  3. Post-Divorce Financial Planning For High Net Worth Individuals: Securing Your Future
Two wedding bands on top of a stack of dollar bills.

Divorce can affect every area of a person’s life, from family relationships to living situations to rhythms and routines. However, one aspect of life that is the most deeply affected is finance. Divorces can be costly, and navigating finances post-divorce often presents unique challenges and difficulties. A divorcee must account for changes in living situations, taxes, loss of marital income, and many other factors. 

This may become increasingly difficult for high net worth individuals, who must manage and account for things like investment portfolios, retirement accounts, and even business ventures. Recovering post-divorce and making a financial plan to move forward can be an incredible struggle. 

For high net worth individuals going through a divorce, speaking with a skilled family law attorney from King Law Offices may be a beneficial step toward seeking a secure financial plan. Consider scheduling a consultation by calling the office at (888) 748-KING.

What Are High Net Worth Divorces?

High net worth divorces are generally defined as any divorce in which the couple owns assets of a high monetary value. This value could take any number of forms, whether it be in bank accounts, collections of valuable antiques, or in a business venture. High net worth individuals must take care to properly account for and address these assets in a divorce.

Division of assets is often a contentious process in divorces, but it can be even more so when high net worth individuals are involved. Due to the high value of these assets, understanding what is and is not considered marital estate will often determine the outcome of the divorce. The implications of this will generally have a significant effect on finances post-divorce.

Divorce Challenges for High Net Worth Individuals

Divorces for high net worth individuals can be challenging. According to the South Carolina Bar, South Carolina is an equitable division state. This means that, instead of all marital property being divided evenly, both parties’ investment and financial needs are taken into account, as well as any fault at play in the divorce. These additional factors can complicate the proceedings and could lead to great financial loss. Understanding the complications during a divorce may help the individual to understand how to proceed post-divorce.

Valuation of Marital Assets

One of the more common issues with high net worth divorces is the valuation of marital assets. While many assets, such as bank accounts and retirement funds, can be easily accounted for, other assets fluctuate in value based on the market and professional opinion. Marital assets such as valuable collector’s items, real estate, business ventures, and intangible property may be difficult to value. Appraising and valuing these items correctly can help establish what is available to divide. 

For more information on post-divorce finances, consider speaking with an experienced family lawyer from King Law Offices.

Enforceability of Prenuptial and Postnuptial Agreements

As with many things in the justice system, written and officially agreed-upon contracts may supersede the general course of state laws. In this case, prenuptial and postnuptial agreements may change how assets are distributed during the divorce.

Many couples choose to set aside assets, pieces of personal property, or even business endeavors by drafting a prenuptial or postnuptial agreement that states that this asset is not considered marital property. This would exempt the asset from equitable division and may affect the distribution of assets post-divorce.

Ownership and Control of Businesses

As South Carolina is an equitable distribution state, the distribution of businesses can be difficult. Often a judge will determine the effort and involvement of one spouse over the other in the distribution of a business. In addition, assessment of the value of a business can be exceedingly difficult, as one must also factor in the future earning capacity of the business or shares of a business.

Other factors that may complicate distribution are shareholder agreements and other legal factors on the part of the business. Certain agreements and legal contracts may be made with one individual in particular, and may not be easily transferable. Also, a change in ownership could affect the running of the business and may disrupt productivity, causing it to lose value. 

How to Protect Finances After a High Net Worth Divorce

When considering financial planning post-divorce, high net worth individuals may need to adapt to very different and sometimes challenging new tasks. In addition to overcoming the challenges of a high net worth divorce and the division of assets, the divorcee must adapt their lifestyle and account for the many loose ends often left in the wake of a divorce. Securing these financial loose ends quickly and effectively may help protect wealth and prevent further losses. 

Updating Documentation

Many spouses share financial accounts and other documentation, such as tax forms, bank accounts, retirement funds, and insurance plans. While many of these may be divided during the divorce, this may not account for the records of each financial institution. This may include deed changes for real estate, name changes on official documents, and removing the other spouse from insurance plans and estate planning documents. 

Cash Flow Planning

Another major change that may arise post-divorce is the shift in income. Many families in this economy have dual incomes, or some spouses are supported mostly by the other. In the wake of a divorce, understanding how to adjust budgets and make a new plan for cash flow may help prevent further loss. 

Accounting for Spousal Maintenance

Spousal maintenance or alimony may also factor into post-divorce financial planning for high net worth individuals. This is outlined in the South Carolina Code of Laws Section 20-3-120, which allows for either spouse to petition for alimony to the courts. Alimony may depend on several factors of the divorce case itself, so amounts and details may vary between situations. Courts will consider factors such as marital misconduct, earnings, earning capacity, standards of living, and the financial and emotional needs of each spouse. Finance planning post-divorce may often entail setting aside money for alimony or accounting for it in one’s income streams. 

Contact a South Carolina Family Lawyer Today

High net worth individuals may need additional financial and legal counseling post-divorce, considering the nature of their assets and the inclination to protect wealth. Understanding the South Carolina divorce code can help mitigate losses during the divorce, but understanding these laws may also help build up a solid financial plan post-divorce. A skilled family law attorney from King Law Offices may be able to assist high net worth individuals with post-divorce financial planning. Consider scheduling a consultation by calling the office at (888) 748-KING.

Previous Post
Mediating Divorce with the Help of Legal Experts: A Comparative Study
Next Post
Timeline for Finalizing a Divorce in South Carolina
Menu