This refers to divorce proceedings between individuals with high net worth. Basically, you have both parties that bring a lot of assets and properties to the marriage. So when the union ends in divorce, there is a whole mountain of assets that need to be managed and distributed. With so much at stake, talks surrounding high-net worth divorces are often long and tedious. That’s because parties have more assets to fight over, says Investopedia. With that said, it’s also widely regarded as a more difficult type of divorce, requiring the help and assistance of expert and skilled divorce attorneys.
You and your soon-to-be ex will need to reveal your income levels to the judge. Knowing what your income is made of, then, should help you prepare for that:
- Base income. Most affluent individuals have a base income. This means you have an actual salary or have periodic sources of income.
- Profit distribution over bonuses. If you’re self-employed, you’ll need to pay out an additional income by way of a profit distribution. You can set the payments at monthly, bimonthly, annual or any other payment schedule that works for you and your ex-spouse. However, if you don’t own a company, then the additional income involves your bonus. Any bonus granted to you at work as a reward for your company performance can be subject to child support.
- Company perquisites. Your car allowance along with your expense allowance can be part of your untaxed income. You and your ex-spouse will need to sort out your perquisites and know which ones are taxed and untaxed.
- Passive income. Any interest from your investment accounts or stocks and bonds can be taxed as well.
- Phantom income
There are a lot of factors that need to be considered in the case of a high-net-worth divorce. To know more, ask for legal help. Hire a lawyer to help you explore possible steps and understand their ramifications.