A high net worth divorce in New Jersey can be an incredibly complex matter, as there are complicated financial structures and important strategic considerations that must be made in order to carefully protect your financial future. A high net worth divorce in New Jersey involves the complex division of assets, as the combined worth of the couple exceeded $1 million. As such, understanding how these assets are divided and the steps you can take to safeguard your assets is critical to protect your finances. For this reason, high net worth divorces can be especially complex. Read on to learn more about high net worth divorces in New Jersey and the best ways to protect your assets.
What Is a High Net Worth Divorce in New Jersey?
A divorce in Sussex County and the surrounding New Jersey communities can be complicated no matter what, but the more assets involved, the more difficult things become. High net worth divorces generally refer to divorcing couples with a combined net worth of $1 million or more. In many instances, these divorces also involve business ownerships, investments, and complicated financial structures.
Characteristics of a High Net Worth Divorce
- Net worth exceeding $1 million, or a considerable difference in income
- Ownership of businesses or other professional practices
- Multiple real estate properties
- Increased likelihood of forensic accounting
What Assets are Considered in a New Jersey High Net Worth Divorce?
There are a number of assets that may be taken into consideration during a New Jersey Divorce. This is because, barring an agreement like a prenuptial or postnuptial agreement that may outline how property is handled, the Sussex County Superior Court, Family Part, will divide assets in accordance with the state’s equitable distribution method for dividing assets. However, in order to determine what assets are subject to division, they will need to be categorized as either marital or separate property first.
Marital property is anything that was obtained during the marriage, was commingled with jointly held assets, or that gained significant value through the contributions of a spouse. Separate property is generally anything that was obtained before or after the marriage and held entirely separate from marital assets.
Common High Value Assets That May Be Considered
- Multiple properties
- High-profile possessions, like valuable art, collections, and vehicles
- Professional practices, like law firms, doctors’ offices, or marketing agencies
- Successful businesses and ownership interests
- Stocks, bonds, and investments
- Retirement accounts, including 401(k)s and IRAs
- Executive compensation packages and benefits
How Can I Protect My Assets in the Event of a High Net Worth Divorce in New Jersey?
One of the best ways to protect your assets in Sussex County is by creating a prenuptial agreement. A prenuptial agreement is drafted and signed by a couple before they are married. It is a document that protects your assets and declares how they will be divided in the event of a divorce.
Some couples choose not to get a prenuptial agreement because of the stigma surrounding them. While prenuptial agreements can be uncomfortable to bring up with your future spouse, they can be greatly beneficial to both parties involved and do not in any way indicate a future divorce.
If a couple does not create a prenuptial agreement and later decides they would like to, they can create a postnuptial agreement. This is the same document, with the same purpose, but it is created and signed after the marriage.
Additional Asset Protection Strategies
- Maintain clear documentation of what is separate versus marital property
- Avoid commingling personal and marital assets
- Enlist the assistance of a forensic accountant to help increase transparency
- Ensure that trusts are established properly
- Regularly update your financial records
What Are the Potential Problems in an NJ High Net Worth Divorce?
During a high net worth divorce, both parties will be required to disclose their financial information. This leaves some people vulnerable to investigation.
For example, if your spouse believes you are hiding some assets, he or she may hire a forensic attorney to investigate your finances. If anything suspicious is found, the IRS may conduct its own investigation, creating even more legal trouble in addition to an already complicated situation.
Common Legal and Financial Risks
- Allegations of hidden or undisclosed assets and property
- Increased IRS scrutiny
- Disputes regarding business valuation
- Disagreements over how assets are classified
- Increased legal costs due to the complexity of the assets involved
Contact Our Sussex County Family Law Firm
We understand that those getting a divorce most likely have several questions regarding the weeks and months to come in Sparta, Jefferson, Newton, and the Surrounding Sussex County communities. Paris P. Eliades Law Firm, LLC is honored to serve the people of New Jersey, including Sparta, Sussex County, Morris County, Passaic County, and Bergen County with the quality legal services they deserve. If you are getting a divorce or have any other questions regarding divorce-related matters, please do not hesitate to contact our firm for a consultation today.