If you and your spouse decide to divorce and have significant assets, you may face some additional challenges in resolving financial issues compared to other couples. An attorney experienced in handling complicated assets can help with this process. In a high net worth divorce, the attorney should take several key steps at the outset to ensure they know exactly what property exists and what it is worth.
Why Is a High Net Worth Divorce Different?
In every divorce, a couple’s assets must be divided in a process known as equitable distribution. Under Connecticut law, all assets that are owned by the parties at the time of the divorce are subject to equitable distribution regardless of how and when they were acquired and how they are titled unless a prenuptial or post-nuptial agreement states otherwise.
The difference in a high net worth divorce is that couples often have a variety of assets and many of them may be difficult to value. These may include real estate, closely-held businesses, bank and brokerage accounts, retirement accounts, pensions, artwork/antiques, trusts, private equity and hedge fund interests, and diverse compensation structures, such as stock options, restricted stock units, carried interest, and perquisites.
What Steps Will Your Attorney Take in Your Divorce?
One of the first things your attorney will do is to gather information on all of your assets and liabilities. This is essential because your property cannot be fairly distributed until it has been cataloged and valued.
In Connecticut, both parties seeking a divorce or legal separation must complete and submit a financial affidavit to the Court. Each of you must list your income, expenses, assets, and liabilities. Your attorney will guide you in filling out a worksheet for your affidavit.
The affidavit is the start of the process of determining your property. This will continue with discovery, where both sides can request documents, answers to questions, admissions or denial of statements, and Depositions as needed.
Once your attorney has a list of all property, the next step is to decide what needs to be valued or appraised.
How Is Property Valued?
Typically, financial experts are hired to provide a complete financial picture of the case and value specific assets. Forensic accountants, real estate and art appraisers, business valuators, and experts in compensation structures, trusts, life insurance, and other areas may be needed.
Often, an attorney will seek to retain experts as soon as possible, before discovery is completed or a valuation must be completed, in order to secure the most qualified professionals. A financial forensic evaluator may be brought in early in the case as a consultant to analyze the couple’s assets and income. The individual can help determine whether any income or assets have been hidden, what assets will have to be valued, and what other experts may be needed in the case. During discovery, the expert can also assist in drafting discovery requests and responses. After discovery, they can aid in preparing and evaluating settlement offers.
How Can You Help Your Attorney?
The best way to assist your attorney is to gather and organize your financial records. Your attorney can give you a full list of documents to provide but generally, they include tax returns, financial and retirement account statements, credit card statements, pay stubs, insurance policies, and other items.
If you are considering divorce, contact us for a consultation. We have extensive experience with the complicated assets that are often a part of high net worth divorces. We incorporate financial experts into our team when appropriate. Our goal is to achieve the best results for our clients.
