If you are a high net worth individual, you may wonder if your divorce is different in any way. High net worth divorces in Michigan can look very different than a typical divorce.
How they differ is important, but in any divorce, you will still want to make sure you have the best legal representation available. That’s why you need to contact The Mitten Law Firm to handle your divorce case.
High Net Worth Divorces Are More Likely to Involve a Prenuptial Agreement
When people come into a marriage with substantial assets or high income, they tend to have a lawyer draft an antenuptial agreement, commonly called a prenuptial agreement, to protect themselves financially from gold-diggers. If the marriage ends in divorce, the person who benefits from the prenuptial agreement will file the document with the court and ask the court to enforce its terms.
The judge will evaluate the document to see if it appears to be a valid and enforceable agreement. The three red flags the judge will look for include:
- How close in time the signature dates were to the wedding. If the bride or groom presents a prenuptial agreement to their intended shortly before the wedding, the judge will suspect that the other party did not have sufficient time to evaluate the agreement before signing it. Also, a last-minute prenuptial agreement suggests that there was no meeting of the minds between the parties; rather, that the embarrassment of canceling the wedding was undue pressure to sign the papers.
- Whether both parties had meaningful legal representation by different attorneys before signing the prenuptial agreement. One lawyer cannot advise both parties on a prenuptial agreement because the parties have an inherent conflict of interest. Both parties should have multiple meetings separately with their respective legal counsel before signing the document. Also, there should be negotiation and give-and-take about the terms, instead of one party dictating all of the conditions of the prenuptial agreement.
- Full disclosure of assets and debts is essential for a prenuptial agreement to be valid and enforceable. For example, if someone listed $5 million in assets on the prenuptial agreement when they actually owned $100 million at that time, the judge will likely nullify the document.
If the judge finds the prenuptial agreement to be valid, the terms of the document will control many aspects of the divorce case.
High Net Worth Divorces Will Often Involve Business Interests & Multiple Income Streams
People with high net worth often own businesses and have multiple income streams. It can be a challenge to sort out the current net value of these items. Often, it is necessary to hire a business valuation expert to track and find all of the assets and place a monetary value on them.
Issues of Inheritance Commonly Come Up in High Net Worth Divorces
Although many of America’s wealthy individuals are self-made, a significant number of people acquired their fortunes the old-fashioned way – through inheritance. Contrary to what some people might assume, the law provides protections for assets a person inherits.
As long as the beneficiary kept the resources separate and followed the other requirements, the other spouse might not get a piece of the inherited property. For example, if one spouse uses inherited money for the down-payment on a family home that gets jointly titled with the other spouse, the judge is likely to consider the down-payment funds as marital property, not separate property. Also, if a person inherits a house and later titles the property jointly with a spouse, the house becomes marital property.