Going through a divorce, no matter the circumstances, is unpleasant for anyone. Although determining child custody can drive emotions to a boiling point, there are other aspects that can lead to extended legal battles. One occurs when there is a high-asset divorce, or a divorce in which the marital estate is valued in the millions of dollars.
With such high stakes on the line and the potential for negative emotions to enter the fray such as jealously, spite, and greed, it can make for a tumultuous situation. If a couple wants to control the division of their assets, they should come to an agreement ahead of time. Otherwise, in Alabama, a judge has authority to divide assets, including property; determine alimony; and rule on child support. If there are no legal documents to structure the divorce settlement such as a prenuptial agreement or a separation agreement, the speed the couple gets through a divorce will depend on their willingness to cooperate.
Divorces that involve high assets can cause significant headaches for both spouses. There are legal loopholes and dead ends that can arise. It will benefit a person to hire a local divorce lawyer who knows the law and the procedures that must take place to allow the process to reach a fair and natural conclusion.
How can I Make My High-Asset Divorce Go Smoothly?
There are a few steps a couple can take to help a high-asset divorce go as smoothly as possible. Although there can be distractions when dealing with a significant amount of wealth, the best way to avoid the pitfalls is to keep it simple.
One way to eliminate potential problems is through transparency. The more information that is revealed between the ex-spouses, the less likely there will be cause for distrust and investigation. Since there are a significant amount of assets to go through, being open and honest will result in a quicker resolution.
A legal agreement such as a prenuptial agreement or a separation agreement will also help. There are benefits and drawbacks to each. With a prenuptial agreement, it is agreed to just before a couple gets married and their feelings for each other are at their peak. They might agree to things for which they might not agree later. Also, prenuptial agreements can easily be thrown out by a judge. One reason is if the judge believes it was signed under duress. A person could have forced the other to sign out of fear of breaking up or another punishment.
As for a separation agreement, it is created during a marriage when feelings between the two have started to sour. There is a more realistic expectation of what each couple is willing to live with after the divorce. This agreement serves as a good template for what the final divorce will look like when a judge approves it.
How Complicated can Child Custody Become in a High-Asset Divorce?
When children are involved in a divorce in Alabama, although it is a high-asset divorce, the core concern remains the same: ensuring that any action is in the best interest of the children. A judge will follow that in determining which parent should take custody of the child and how much child support the other should pay.
It is important to note that in Alabama, the wealth of either parent will not have a bearing on what is best for the child. In other words, the wealthier parent might not necessarily be the better caregiver. As for child support, Alabama utilizes a schedule of basic child support obligations, which explains the minimum amount that a parent must provide based on the parents’ combined income and how many children they have.
Given that there could be disparity in the amount of money the parents have, the state implements an income shares model when determining child support. That means both parents must provide the same ratio of support that they had provided prior to the divorce. To implement this plan, the court will determine the total amount the parents spent on each child and from there assign a specific percentage they will have to pay in child support.
This final percentage can be adjudged by the court if a judge determines that it is not in keeping with certain circumstances. High-asset divorces will differ than others because these child support payments will go beyond the medical and educational costs of the child. They could extend into personal hobbies or outside activities.
There are limits to when the child support guidelines will apply in Alabama. When the combined gross incomes of both parents exceed $240,000 per year or $20,000 per month, the guidelines will not apply. At that point, it will be up to the court to determine child support based on what the judge determines is a reasonable need for the child and an appropriate contribution from each parent.
What Factors Go into Determining Alimony in a High-Asset Divorce?
There are no specific guidelines in Alabama when it comes to spousal support or alimony. The court has full autonomy in determining the support, including who will pay; how much they will pay; how long the payments will last; and how those payments should be made, either in a lump sum or in installments.
High-asset divorces often take time, so a judge may grant temporary alimony. This does not mean that the arrangement will continue beyond the settlement of the divorce. The factors that lead to temporary alimony include the following:
- Length of time the couple was married
- The cause of the divorce
- Assets owned by the couple, the marital estate; and separately, including debts
- Current income of both spouses, including recurring earnings and future income
- Age and health of each spouse
- The standard of living for the spouses and the ability of each to maintain it
A judge might also consider how much a spouse should contribute to maintain the household and care for the children. The court has flexibility when determining a standard of living. Those going through a divorce should work with a divorce lawyer and draw up their assets as well as their expenses to submit to the court. Expenses should include all the basic elements such as food, clothing, and education. However, spouses should consider potential future costs such as the rising price of items and future health needs.
How Will Our Property be Divided in a High-Asset Divorce?
Dividing marital assets can be the most complicated aspect of a divorce. As with other divorces, the ideal situation is for the divorcing couple to determine how to divide their assets and money. If the two cannot agree on how to divide their assets, the court will step in.
Alabama uses an equitable distribution system for dividing the estate. This means dividing the property fairly and equitably, although that does not mean in half. The judge has discretion on how to divide the assets. Therefore, if a couple wants more control over the assets of which they take possession after a divorce, it is best to work with their ex-spouse ahead of time.
There are several things that a judge will consider when dividing the assets, such as the needs of each spouse, the length of time they were married, and the other sources of income they each have. However, under Alabama law, one thing that does not have to be a factor is any financial misconduct or wasting of marital assets by one or both spouses. However, the court can consider the circumstances that led to the divorce as a factor in a fault-based divorce.
Huntsville Divorce Lawyers at Hodges Trial Lawyers, P.C. Work with You Through a Complicated High-Asset Divorce
Any divorce can be complicated, but it can be more so when there is a significant amount of assets involved. The Huntsville divorce lawyers at Hodges Trial Lawyers, P.C. will expediate your divorce proceeding as quickly as possible and help get you the settlement for which you are entitled. For a free consultation, call us at 256-539-3110 or 888-539-3110, or contact us online. Our Athens and Huntsville, Alabama, offices represent clients throughout North Alabama, including Madison County, Limestone County, Marshall County, Jackson County, Morgan County, and Lauderdale County.