Going through a high-asset divorce when you’ve been the lower-earning spouse in your marriage can be scary. Because high-asset divorces often involve complex financial matters such as business valuations, appraisals, and sometimes tracking hidden or misappropriated assets, how well you prepare can greatly influence the outcome. With this in mind, consider the following strategies.
Seek legal guidance from an experienced Alabama divorce attorney.
High-asset divorces are much more complicated than typical divorces. Therefore, to protect your rights and have the best possibility of a fair division of assets, first and foremost, you should hire an Alabama divorce attorney with experience in this area of law.
Specifically, your attorney should have experience with the valuation of complex investment portfolios, business valuations, deferred compensation, prenuptial and postnuptial agreements, alimony, and child custody, each of which are issues frequently arising in high-asset divorces.
Get a handle on what comprises your marital estate.
The first step in your divorce should be to list and value (if you can) your and your spouse’s joint assets. Joint assets are generally those assets you and your spouse accumulated during the marriage. That said, what constitutes joint versus separate assets can be much more nuanced, requiring the insights of an Alabama divorce attorney. Generally, though, in high-asset divorces, marital assets may typically include real estate, business interests, a family business, retirement assets, investment accounts, intellectual property like patents, and luxury items such as artwork, jewelry, and classic cars.
It’s common for the high-earning spouse to have controlled the finances during the marriage, leaving lower-earning spouses unaware of the full extent of their marital estate. Therefore, besides an Alabama divorce attorney, hiring a forensic accountant or financial expert is important; they will conduct an in-depth investigation into your assets and debts so that you have a fuller understanding of your financial picture.
It may also be possible that your spouse has hidden assets or decides not to disclose certain assets during the discovery phase of your divorce because they don’t want them to become subject to equitable division. This is again why a professional assessment of your spouse’s bank statements, tax returns, and investments is critical to uncover anything that may have been overlooked or misappropriated.
Understand your legal rights as a lower-earning spouse in your high-asset divorce.
Alabama is an equitable distribution state, meaning that Alabama courts divide marital property fairly but not always equally. Courts consider factors such as the length of the marriage, financial and non-financial contributions to the marriage, the spouses’ lifestyle while married, and their needs during separation and after the divorce becomes final.
As the lower-earning spouse in your marriage, you should be entitled to a fair share of the marital assets, even if you didn’t contribute financially. Courts recognize non-monetary contributions such as raising children and managing the household, so a judge will consider this dynamic if you were the primary caregiver and your spouse worked outside the home, for example.
Discover what spousal support you may be entitled to as a lower-earning spouse involved in a high-asset divorce.
As the lower-earning spouse in your marriage, you may be entitled to spousal support (alimony). While your life may look different after your divorce, spousal support can help you maintain the standard of living you were accustomed to during your marriage.
Alimony can be awarded on a temporary or permanent basis, depending on factors such as the length of your marriage and the earning capacities of both you and your spouse, among other factors. Your Alabama divorce attorney can help calculate a reasonable amount of alimony, which should likewise take into account your spouse’s ability to pay.
Your attorney can also apprise you of the tax implications of receiving alimony, as alimony awards affect the paying spouse and the receiving spouse differently. Your attorney can and will also advise you regarding Alabama law and certain requirements and restrictions under the law you need to know about to continue receiving alimony if it is awarded to you.
A certified public accountant can further help with tax planning now and post-divorce. Your divorce attorney should be able to recommend one from their network if you don’t have someone in your network.
Take careful measures to protect your financial health and credit.
It’s easy to overlook your financial well-being during a divorce, especially if your spouse managed the money. However, now it’s time to take control of what you can.
The best place to start is to check your credit report. Once you have it, you can check to see how much debt you have and if there is any debt you were previously unaware of. With your credit report in hand, you will be better equipped to work with your Alabama high-asset divorce attorney to identify assets and debts and create a strategy for fairly dividing your assets and debts.
In addition, now is also the time to begin thinking about a financial plan for the future and a tentative post-divorce budget. If you’re awarded alimony, child support, and assets, you should consider how much money you have and how you will make up any shortfall.
Hiring a financial advisor, such as a certified divorce financial analyst (CDFA) who focuses on divorce, along with your high-asset divorce attorney, can help you manage and budget for your post-divorce life. Again, your high-asset divorce attorney should be able to recommend someone to you.
As a lower-earning spouse in a high-asset divorce, think about the impact custody and child support can have on your case.
If you have children, custody and child support will likely be important issues in your divorce. In high-asset divorces, child support often goes beyond basic needs to cover expenses such as private school tuition, extracurricular activities, and college savings.
As a lower-earning spouse, you may be entitled to substantial child support beyond the state formula to maintain your child’s standard of living. With this in mind, document all childcare costs and discuss them with your Alabama high-asset divorce attorney working to meet your financial needs.
Consider the effects of prenuptial and postnuptial agreements on your high-asset divorce as a lower-earning spouse.
If you signed a prenuptial or postnuptial agreement, that agreement will likely play a pivotal role in your divorce. These agreements can favor the higher-earning spouse but aren’t always ironclad.
For example, if you signed your agreement under pressure or it appears unfair due to a change in circumstances, you may be able to challenge it with the support of your Alabama high-asset divorce attorney. Courts also heavily scrutinize waivers of spousal support or the relinquishment of assets.
Work with your Alabama high-asset divorce attorney to negotiate from a position of strength.
Divorce negotiations in Alabama high-asset divorces can be even more emotionally charged than in non-high-asset divorces due to what’s at stake. Even so, do your best not to succumb to being intimidated or pressured into accepting an unfair settlement.
Instead, work closely with your Alabama high-asset divorce attorney to gather all your financial information so you can present a clear picture of your marital estate and everything surrounding it. Being proactive and well-prepared will put you in a stronger position during tense negotiations. Remember, even as the lower-earning spouse in your marriage, you are entitled to your fair share of the marital assets.
Don’t neglect to take care of your emotional and physical well-being.
It’s important to take care of your mental and physical health during the divorce process, which can negatively impact both. To help, enlist the assistance of a therapist or counselor, particularly if there has been a power imbalance or manipulation in your marriage, and lean on the support systems in your life, such as positive-minded close friends and family. Eat nourishing foods, get enough sleep, exercise, and find ways to de-stress.
Find an Alabama high-asset divorce lawyer if you are a lower-earning spouse.
Going through a high-asset divorce as a lower-earning spouse requires diligence, preparedness, and the right team. Understanding your financial rights, working with experienced professionals, and prioritizing your physical and emotional well-being can increase your likelihood of achieving a fair resolution while securing your financial future for your post-divorce life.
At Summit Family Law, we know how complicated and stressful going through a high-asset divorce can be when you are a lower-earning spouse. With offices conveniently located in Huntsville and Birmingham to serve you, we look forward to learning more about you and your unique circumstances. Call us today or schedule a consultation.
