Divorcing Spouses With High Net Worth Should Work With an Experienced High-Asset Divorce Attorney in Maryland
As a married high-net-worth individual, you have likely made strategic choices to pursue a lifestyle you hope to retain and enjoy for many years to come. If an impending divorce may be on your horizon, you need to understand that divorcing spouses with high net worth face unique risks and complexities that demand the guidance of an experienced high-asset divorce attorney in Maryland. At the Law Offices of Ellen L. Lee, we proactively assess your situation to identify threats to your interests and devise strategies to prevent problems from manifesting both before and after your divorce is finalized.
If you are facing a high-net-worth divorce, you will need to plan properly to maintain your lifestyle well beyond the conclusion of your divorce case. Between now and then, many obstacles can threaten your lifestyle and your finances. With the help of your attorney, you can navigate many complex issues related to asset valuation and fair distribution of those assets, towards ensuring your financial security after the divorce is completed. Individuals with more marital assets essentially have further to fall if they do not take appropriate steps to prepare for and navigate their divorce.
High-net-worth divorces often involve complex assets such as real estate, businesses, and investments. An experienced attorney who understands how to accurately value these assets can help ensure a fair distribution. High-asset divorces may involve intricate issues like property valuation, existing prenuptial agreements, and hidden assets. Our lead high-asset-divorce attorney, Ellen L. Lee, draws upon her background in counseling and psychology in addition to 35+ years handling complex and adversarial Maryland divorce cases to help you navigate these circumstances effectively from the beginning as you work together to assess and plan for your divorce case.
The financial stakes are higher for high-net worth-individuals. A high-asset divorce attorney can help protect the assets necessary to maintain their established lifestyle. A high-asset divorce can be emotionally draining, but an experienced attorney can guide and support you throughout the process and alleviate some of your emotional burden. Contact us today at the Law Offices of Ellen L. Lee, LLC to schedule a high-asset divorce consultation, during which our founding attorney will work with you to assess your unique situation and begin planning the steps to safeguard your post-divorce financial future.
High-Net-Worth Divorce Cases Often Involve More Complex Issues Involving Assets and Finances
High-net-worth divorce issues are typically more complex than issues in other Maryland divorce cases. Many concerns particular to high-asset divorces are due to the extensive and diverse nature of the assets involved. The following are some examples of these complex issues:
- Asset Valuation and Division: In high-net-worth divorces, assets often include businesses, real estate, investment portfolios, and more. Determining their accurate value can be complicated but is essential for fair distribution. Illiquid assets like businesses or real estate can be difficult to equitably divide, particularly if one spouse is awarded an asset that cannot easily be converted into cash. An experienced attorney can work with financial experts to ensure accurate valuations.
- Hidden Assets: One spouse may attempt to hide assets to shield them from division. A skilled attorney can employ forensic accountants to uncover hidden assets and pursue a fair division.
- Tax Implications: The division of assets can have significant tax implications. An attorney knowledgeable in tax law can assist in structuring a settlement to minimize tax liabilities. The sale or transfer of certain assets as part of the divorce settlement may trigger capital gains taxes.
- Spousal Support Determination: Determining spousal support, or alimony, can be complex in high-asset cases. An attorney can advocate for a fair determination based on the couple’s lifestyle and earning capacities.
- Child Support Determination: Child support concerns can be more complex due to the high income levels involved. Lifestyle maintenance is often a significant factor to address in high-asset divorces.
- Marital vs. Separate Property: Identifying which assets are marital property and which are separate can be challenging, especially with assets owned prior to marriage. An attorney can help categorize assets correctly.
- International Assets: Some high-net-worth individuals may have investments or assets in other countries, adding another layer of complexity. An attorney with experience in international asset division can navigate this process.
- Privacy Concerns in High-Asset Divorces: High-net-worth individuals often value privacy, so they may prefer methods like mediation or collaborative divorce to keep their matters out of court.
High-net-worth divorces entail assets that surpass the usual marital home and personal possessions. These assets encompass stocks, bonds, business interests, offshore accounts, real estate investments, and retirement accounts. The valuation of these assets may necessitate the knowledge and insights of professional appraisers, forensic accountants, and financial specialists.
A family law attorney experienced in high-net-worth divorces in Maryland is invaluable in addressing these complex issues, protecting your interests while seeking fair and equitable property division on your behalf. Contact the Law Offices of Ellen L. Lee, LLC today to schedule a consultation so we can carefully assess your situation and help you plan for your high-asset divorce.
Be Aware of These Common Factors and Concerns for Divorcing High-Net Worth Couples
High net-worth can impact several issues to be addressed during the course of your divorce in Maryland:
- Complex Assets: Future income such as executive compensation plans, intellectual property, trusts, lottery winnings, or future earnings of a business can complicate valuation and related decisions.
- Valuation of Assets: Business interests, trusts, and other financial matters are more likely to come into play in high-net-worth divorce cases.
- Investigating Hidden Assets: If a spouse may have dissipated marital assets, financial dissipation analysis will be necessary to identify these actions and to prove intent to waste or hide these assets in relation to the upcoming divorce and the corresponding asset valuation and distribution processes and decisions.
- Prenuptial or Postnuptial Agreements: These contracts are more likely among high-net-worth couples.
- Division of Family-Owned Businesses: If the couple owns a business together, deciding how to divide it or determine its value can be complex and contentious.
- Distribution of Assets: Implications of specific asset ownership can affect the equitable distribution of other marital assets when dividing marital property.
For high-net-worth individuals going through a divorce, working with a seasoned high-asset divorce lawyer in Maryland who has dealt with these issues many times before can provide invaluable guidance, protection, and peace of mind.
Understanding Maryland’s Standard Approach to Property Distribution in a Divorce
Maryland follows the principle of “equitable distribution” when it comes to property distribution in a divorce. This means that the court aims for a division of property that is fair, but not necessarily equal.
The Maryland Marital Property Act governs the division of property. Under this act, all property acquired during the marriage, known as “marital property,” is subject to equitable distribution. This includes assets like real estate, vehicles, bank accounts, retirement plans, and personal property.
The Judge Will Divide Your Property If You and Your Spouse Cannot Agree On Terms
If the divorcing parties cannot agree on how to divide their property, the court will make the determination. The judge has a great deal of discretion in deciding how to divide all marital property.
However, it’s important to note that Maryland law generally considers only property acquired during the marriage to be “marital property” and it is thus able to be divided between the two parties. While Maryland is not a 50/50 divorce state, its laws aim to ensure that the division of property in a divorce is equitable and fair.
Changes in Maryland’s Divorce Grounds Affect Potential Paths for High-Asset Divorce
The passage of Maryland Senate Bill 36 in 2023 significantly altered the state’s divorce laws by repealing fault-based grounds for divorce and instead allowing only three no-fault grounds for absolute divorce. This change can have several implications for high-net-worth divorces:
- Simplification of Proceedings — Without the need to prove fault, divorce proceedings may become more straightforward and less contentious, potentially leading to quicker resolutions. For high-net-worth individuals, this can mean less time spent in litigation, leading to lower legal costs.
- Focus on Financial Matters — With the focus shifted away from proving fault, the main concern becomes the equitable distribution of assets. In high-net-worth divorces, where complex assets and large sums are involved, this allows both parties and their attorneys to concentrate more on the financial aspects of the divorce.
- Reduced Emotional Strain — Fault-based divorce often involves exposing personal issues and misconduct, which can heighten emotions and create adversarial environments. The absence of fault-based grounds may reduce the emotional strain and drama, creating a more amicable environment for negotiation and settlement.
- Implications for Marital Agreements — Prenuptial or postnuptial agreements often include provisions related to fault-based grounds for divorce. With the removal of these grounds, such agreements may need to be reviewed and revised.
It is important to note that while SB 36 has removed fault-based grounds for divorce, this does not necessarily mean that the behavior of the parties during the marriage is entirely irrelevant. Judges may consider a spouse’s behavior when deciding on matters such as alimony and custody. High-asset divorces may involve dissipation of marital assets by one of the spouses, which also can have a significant impact on your divorce and your future.
The changes brought about by SB 36 may simplify the divorce process, but they do not diminish the complexity of high-net-worth divorces. Individuals expecting to face a high-asset divorce should immediately seek guidance from experienced divorce attorneys to ensure their financial interests are adequately protected.
Division of Assets in a Maryland High-Asset Divorce
Maryland follows an “equitable distribution” principle in property division during divorce, including high-asset cases. This means that the court divides marital property in a manner it deems fair, but not necessarily equal. Marital property includes all assets acquired during the marriage, regardless of whose name is on the title.
In a high-asset divorce, the process can be more complex due to the nature and extent of the assets involved. These assets may include businesses, real estate, investments, retirement accounts, and other valuable items. Due to the complexity of these assets, valuation can be challenging and may require the assistance of financial experts.
High-Asset Divorce and Alimony (Spousal Support) in Maryland
When determining spousal support (alimony) in a high-asset divorce, Maryland courts consider several factors. These include the ability of the party seeking alimony to be wholly or partly self-supporting, the time necessary for the party seeking alimony to gain sufficient education or training to enable that party to find suitable employment, and the standard of living that the parties established during their marriage.
High-Asset Divorce and Child Support in Maryland
Child support determination in high-income cases can also differ. Maryland uses the Child Support Guidelines to calculate child support. However, these guidelines are only presumed to apply to parents with a combined income of up to $30,000 per month. For parents with higher combined incomes, the court determines child support on a case-by-case basis, taking into account the child’s needs and each parent’s financial status.
Maryland applies the same basic principles in all divorces, but high-asset divorces often involve additional complexities that require the legal knowledge and the insights that come with many years of experience in these cases. Work closely with our law firm to anticipate these complicated issues that can arise in divorce cases when you have minor children and substantial assets.
Processes and Duration for a High-Asset Divorce
A high-asset divorce in Maryland generally refers to a dissolution of marriage proceeding that involves more than one million dollars in net liquid assets. These assets may include cash, stocks, retirement accounts, real estate, businesses, and other valuable items.
While the basic divorce process in Maryland remains the same regardless of the assets involved, high-asset divorces involve additional complexities and tend to take longer to resolve. Additionally, disputes over asset division are more likely, which can further extend the duration of the divorce process.
Here’s a brief general overview of the Maryland divorce process:
- Filing for Divorce: The first step is to file a Complaint for Absolute Divorce with the circuit court in the county where either spouse resides.
- Discovery Process: This is where each spouse discloses their assets and liabilities. In high-asset divorces, this process can be complicated and time-consuming due to the variety and complexity of the assets.
- Asset Valuation: High-asset divorce often requires financial experts to value marital assets, especially when it comes to businesses, investments, and other complex assets.
- Division of Assets: Maryland follows an “equitable distribution” principle, meaning the court divides marital property in a manner it deems fair, not necessarily equal. In high-asset divorces, achieving an equitable division can be challenging due to the complexity and volume of the assets.
- Negotiation and Settlement or Trial: If the spouses cannot agree on the division of assets, the case will go to trial, and a judge will decide the division of assets.
Important Concepts and Processes Concerning Property Valuation for a High-Asset Divorce
Property valuation in a high-asset Maryland divorce involves several key steps and complexities. Due to the nature of these divorces, which often involve substantial and diverse assets, a team of high-asset divorce attorneys and financial experts is typically required to accurately value marital assets.
- Identification of Assets: The first step in property valuation is the identification of assets. In Maryland, marital property includes all assets acquired during the marriage, regardless of whose name is on the title. This can include real estate, bank accounts, stocks, furniture, pensions and retirement assets, cars, and other personal property.
- Business Valuations: If a business is part of the marital property, business valuations are often necessary. These valuations can be complex and require an understanding of the specific industry and business operations.
- Asset Tracing: In some cases, asset tracing may be necessary to determine which assets are marital and which are separate. This process can be particularly important if one spouse believes the other is hiding assets.
- Appreciation of Separate Property: Under Maryland law, the appreciation in value of separate property may be subject to division if the increase is due to the active efforts of the asset-owning spouse.
- Valuation of Each Asset: Once the marital property has been identified, each asset must be valued. This process can be complex, particularly for non-liquid assets like real estate, businesses, and investments.
- Equitable Distribution: After the assets have been valued, they must be divided equitably (fairly, not necessarily equally) under Maryland’s equitable distribution laws.
Obstacles in Maryland Divorces Involving Business Ownership
Addressing the intricacies of divorces involving business ownership in Maryland brings about unique obstacles. Maryland operates under the equitable distribution principle, meaning that marital assets — including businesses — are allocated in a manner deemed fair by the court, despite not necessarily being equal.
Divorces involving business ownership encompass intricate complexities that often necessitate guidance of an experienced attorney. Important concerns for Maryland divorces involving ownership of a business include:
- Business Evaluation: Assessing the value of a business can be intricate, often necessitating the involvement of business appraisers or forensic accountants.
- Allocation of Business Assets: Once the business’s value is determined, the next hurdle is deciding how to distribute it. This could involve one spouse buying out the other’s share, selling the business and dividing the proceeds, or continuing joint business operations post-divorce.
- Concealed Assets and Income: In some instances, a spouse may try to conceal assets or underreport income to manipulate the business’s valuation. When such deceitful behavior is suspected, we may conduct financial dissipation analysis with the help of a forensic accountant to protect your wealth and your lifestyle.
- Future Earnings: Anticipated future earnings of the business introduce additional complexity to a divorce case. These earnings may influence asset division, particularly if one spouse is expected to significantly benefit from the business after the divorce.
Determining business ownership, assets, debts, and risks in divorces among spouses in Maryland involves various considerations. The ownership of a business is typically assessed based on the names on legal documents, such as incorporation papers or partnership agreements. However, marital property status may be applicable even if the business is solely in one spouse’s name, particularly if it was established or expanded during the marriage.
During the business valuation process, the evaluation encompasses assets, debts, and risks associated with the business. Tangible assets including property and equipment, intangible assets like intellectual property and goodwill, as well as liabilities and the potential risks linked to future earnings and market conditions are taken into account to determine an accurate valuation.
Benefits of Divorce Mediation and Working Towards Agreement Among Spouses in a Maryland High-Asset Divorce
Divorce mediation can offer several specific benefits for high-asset couples or high-net-worth individuals approaching a divorce in Maryland:
- Cost-Effective: Mediation generally involves fewer attorney fees and costs than traditional court proceedings, which can be significant in high-asset cases.
- Confidentiality: Mediation is a private process, keeping the details of your case confidential. This privacy can be particularly beneficial for high-asset divorces where financial details might be sensitive.
- Control over the Decision: Mediation allows spouses to negotiate the terms of their divorce, providing control over the resolution of disputes. This can be vital when large assets or complex financial arrangements are involved.
- Deep Knowledge and Experience in Asset Valuation: A skilled mediator can guide the couple through the valuation of complex assets, helping to achieve a fair division. Valuation experts can be particularly crucial in high-asset divorces where assets like businesses, real estate, investments, and retirement accounts are involved.
- Time-Efficient: Mediation can often be completed faster than traditional litigation, which can be protracted in high-asset cases due to the complexity of the assets involved.
- Preserving Relationships: Mediation is a collaborative process that can help preserve relationships, which can be important for high-asset couples with shared business interests or children.
- Emotional Support: A mediator can help guide couples through the emotional aspects of divorce, which can be heightened in high-asset cases due to the high stakes involved.
While high-asset divorce cases in Maryland can be complex, mediation offers a range of benefits that can make the divorce process more manageable, efficient, and private. Other Alternative Dispute Resolution (ADR) approaches like collaborative divorce may also be beneficial in helping to reduce conflict. Each high-asset divorce case is different, and we can identify the appropriate approach for your situation during your consultation.
What To Expect in a High-Asset Divorce Case — And Your Next Steps
High-asset divorces in Maryland can present a range of complex issues that require careful navigation. Maryland’s principle of “equitable distribution” means marital assets are divided in a manner deemed fair by the court, but not necessarily equally. High-asset divorces can be emotionally charged, leading to decisions that may not be financially beneficial. It’s important to make decisions based on sound legal and financial advice rather than emotions.
One spouse may attempt to hide assets to avoid their equitable distribution. Uncovering these hidden assets can be a complex process. The sale or transfer of certain assets as part of the divorce settlement may trigger capital gains taxes. Understanding these tax implications is critical to protect your financial interests.
If you are a high-net-worth individual facing divorce in Maryland, you should discuss the following concerns with your attorney:
- Strategies for asset protection and division
- Potential tax implications of the divorce
- How to uncover and address any hidden assets
- Interpretation and enforcement of prenuptial agreements or postnuptial agreements
- Potential alimony and child support considerations
- Privacy concerns and strategies to maintain confidentiality
We can address these questions and more in the context of your specific situation during your initial consultation with our founding attorney.
Schedule a Consultation with Ellen L. Lee, a High-Asset Divorce Attorney with Over 35 Years of Experience Practicing Family Law in Montgomery County, Maryland
High-asset divorces involve higher stakes, including greater risk of lost assets and lifestyle changes due to decisions made during the divorce process, and determining income and assets can be a very intricate process. The diversity of income sources and the complicated assets involved contribute to this complexity. In addition to wages, income may originate from dividends, interest, rental income, and business profits.
These concerns underscore the importance of working closely with an experienced Maryland high-asset divorce lawyer as soon as you believe you may be heading for divorce. If you have substantial assets, divorce can put them at great risk. Our law firm regularly works with business valuation experts, forensic accountants, and other professionals to protect our clients’ wealth and interests through the divorce process.
With over three decades of commitment, Ellen L. Lee has devoted herself to offering personal support to individuals and families as they navigate the difficulties that arise during divorce and related issues. By fostering a welcoming and easily approachable atmosphere for her clients, she ensures effective communication and a unified outlook on moving forward in the face of family law disputes.
If you’re seeking guidance regarding high-asset divorce concerns in Maryland, we are here to assist you. Our team acknowledges the uniqueness of each client’s circumstances and carefully analyzes the particulars of your situation, ensuring a deep understanding of your concerns and aspirations. This personalized approach empowers us to fervently advocate for your interests throughout every stage of your divorce process.
For a confidential consultation regarding high-asset divorce with our founding divorce attorney Ellen L. Lee, reach out to us at the Law Offices of Ellen L. Lee, LLC today. Call us at (301) 279-0692 or complete our online form. We are here to conduct an initial information-gathering session in person at our boutique office in Rockville, Maryland, through video conference, or over the phone at a time that suits you. Our flexible scheduling includes evening and weekend appointments, ensuring convenience and meeting your specific needs.
Why Choose the Law Offices of Ellen L. Lee
Ellen L. Lee has devoted over 35 years of unwavering commitment to aiding individuals and families in Montgomery County, Maryland with their family law needs. Grounded in counseling and psychology, she provides personalized guidance and assistance to her clients in an inviting atmosphere — prioritizing effective communication while forging new beginnings amidst family law disputes.
- Tenacious & Compassionate Legal Support
- Trusted Guidance that Exceeds Expectations
- Full Range of Family Law Services
- Flexible Consultation Times: Nights and Weekends are Available
- Over 35 Years of Experience Practicing Family Law in Montgomery County, Maryland
Our Founding Attorney conveniently meets with clients via phone, video conference, or in person at our office in Rockville, Maryland.