What is a high net worth divorce?
A high net worth divorce refers to a divorce where the assets and financial holdings of one or both parties are substantial, typically involving a significant amount of wealth.
This type of divorce usually involves complex financial matters, including large sums of money, investments, business assets, properties, and potentially international holdings, which can sometimes become contentious and highly intricate
Although a high net worth divorce is not strictly defined, the Financial Conduct Authority (FCA) considers someone to be of high net worth if they earn in excess of £300,000 per year and/or have assets valued over £3million.
Issues in a high-net worth divorce
There are several areas that may need to be dealt with during a high net worth divorce, some of which can cause issues and need legal attention, including:
- Properties
Often individuals have multiple properties in the UK and abroad, including family homes, second homes and rental investments that need to be discussed on how best to divide these properties. - Businesses assets and investments
Individuals may have ownership stakes in private or public companies, which may require a valuation by independent experts. Plus stocks, bonds and other investments that need fully disclosing. - Pensions
There are three common ways of dividing pensions in high net worth divorces: offsetting against other assets, pension sharing orders and pension attachment orders. Our legal experts can advise on the best option for your individual circumstances. - Inherited wealth
Large inherited estates or family assets that may be subject to specific legal considerations during a divorce, such as family trusts, heirlooms, or inherited properties, can present unique challenges. These assets may be treated differently depending on their nature, the jurisdiction, and whether they were acquired before or during the marriage. - Trusts
If assets are held in a family trust, the terms of the trust may stipulate that they are not subject to division in the event of a divorce. However, whether the assets are included in the divorce settlement can depend on the legal jurisdiction and the specifics of the trust agreement. Courts may consider the level of control one spouse has over the trust or whether they received benefits from it during the marriage - Spousal maintenance
In high net worth divorces, spousal maintenance can be a significant issue. While courts no longer routinely order long-term spousal support, a spouse may be entitled to ongoing financial support based on factors like the length of the marriage, the standard of living, and the financial needs of both parties. - Child maintenance and arrangements
Children’s need can be a major focus in terms of child arrangements and financial support. One parent may be better able to provide for the children’s schooling, extracurricular activities, and general lifestyle. However, the focus is on maintaining a stable, supportive environment for children, rather than simply basing this on financial capability.The financial support required to maintain the children’s lifestyle post divorce, including contributions to education, housing, and other costs, can be a point of negotiation. Child maintenance arrangements may also come under scrutiny, especially when high incomes are involved.A parent can apply to the court for financial provision towards a child’s financial needs if the other parent isn’t willing to volunteer sufficient support.
Benefits of using a high net worth divorce solicitor
There are several benefits of using a high net worth divorce solicitor including:
- Experience and skills
As a high net worth divorce includes more complicated financial matters, solicitors with this type of experience have the knowledge and skills in dealing with these financial matters. - Discretion
High net worth solicitors can ensure discretion and confidentiality to their clients. This may be important for individuals who want to keep their divorce settlements private for various reasons. Our solicitors have worked for numerous high profile individuals who have required their divorce to be confidential. - Connections and guidance
In many high net worth divorces, one or both spouses may own businesses. A high net worth divorce solicitor will typically have connections with expert business valuers or forensic accountants who can accurately determine the value of the business, whether it’s a small family-owned business or a large corporation. This is essential for ensuring a fair division of assets and protecting the business’s interests.Further, solicitors can provide guidance to financial advisors who can help in structuring the financial settlement, especially when it comes to long-term wealth management. Helping to assist in identifying strategies to minimise tax liabilities, preserve wealth, and ensure that both spouses have financial security moving forward.
How are high net worth divorces different from regular divorces?
High net worth divorces differ significantly from regular divorces due to the complexity of the financial assets involved, the additional legal considerations, and the level of detail required to ensure a fair division of wealth.
Here are some of the key differences:
- Complexity of assets
In high net worth divorces, the assets often include multiple properties, businesses, investments, pensions, trusts, and sometimes international holdings. Regular divorces typically involve simpler financial situations, such as shared homes, savings, and smaller investments. - Asset valuation
For high net worth individuals, accurately valuing assets is a crucial step in the process. Assets like businesses, artwork, intellectual property, or real estate holdings can require expert valuators, accountants, and other professionals to ensure a fair assessment. In regular divorces, valuations are usually simpler, and there may not be as much complexity in determining the value of shared property or assets. - Business interests
If one or both parties in a high net worth divorce own a business, the division of business assets can be highly contentious and complicated. Business valuations, control, and the impact of dividing shares or ownership can lead to significant legal and financial challenges. In regular divorces, businesses are typically not a central issue.
How our solicitors can support you with your high net worth divorce
Our high net worth divorce solicitors will provide support throughout the divorce process, guiding you through complex legal, financial, and emotional challenges.
Given the significant wealth involved, we understand these cases often require more intricate legal strategies and expertise to ensure a fair, equitable, and efficient division of assets.
During the initial consultation our team will discuss your individual situation, needs, assets involved, general dynamics of the marriage and assess your situation and explain the legal process, including filing for divorce, financial disclosure and negotiation and mediation.
Our team can support with court application if needed, and finalise the divorce settlement or court order, to legally end the marriage and make sure that all needs are met.
