How can high-net individuals protect their assets in a high net worth divorce?

Divorce can be an overwhelming process with a lot at stake, such as investments, businesses, and financial accounts. However, for high-net-worth individuals in Memphis and the surrounding Shelby County area, divorce can be complex, often involving valuable assets that require careful legal and financial evaluations. If you are a high-net-worth individual where divorce is imminent, contact an experienced Memphis, Tennessee high net worth divorce lawyer who can help you navigate this intricate legal process. We have experience representing high-net individuals and are dedicated to ensuring your assets are fairly divided.

What Is Considered a High Net Worth Divorce in Tennessee?

A high-net-worth divorce occurs when one or both spouses own a considerable amount of assets, investments, or business interests. Typically, a divorce is considered high-net-worth when the marital estate is valued at or over one million dollars.

These divorces are generally more complicated than standard divorce proceedings because they generally require the valuation of complex assets, multiple income sources, investment portfolios, retirement accounts, and a considerable amount of personal property.

Characteristics of a High Net Worth Divorce

• Marital estate is valued at or exceeds one million dollars
• Business ownership may be involved
• Complex investment portfolios typically
• Disputes over property distribution are generally more complex
• Spousal support may involve drastic differences in income
• Analysis by forensic accountants may be required

How Can I Protect My Assets During a High-Net-Worth Divorce in Tennessee?

When high-net individuals get married, there are certain precautions they should take to protect their assets. Individuals can create a prenuptial agreement that will ensure their assets are protected if the marriage does not work out. They can also create a postnuptial agreement, which is created during the marriage instead of before.

These types of legal agreements can help safeguard your assets if your marriage fails. Certain individuals neglect to protect their assets because they do not believe they will ever have to split them during a divorce. Unfortunately, not all marriages last. High-net individuals should take the necessary provisions to ensure their assets are protected if their marriage ends.

In Tennessee, asset protection during a divorce often entails the careful documentation of separate property, maintaining detailed financial records, and obtaining accurate valuations for assets before settlement negotiations even begin.

Asset Protection Strategies for High-Net Individuals

• Establishing valid prenuptial agreements prior to the marriage
• Creating an enforceable postnuptial agreement if you are already married
• Ensuring clear records of separate vs. marital property
• Preventing the commingling of assets
• Enlisting the assistance of forensic accountants when necessary
• Reviewing tax implications prior to entering into settlement agreements

How Does Tennessee Equitable Distribution Impact High-Net-Worth Divorces?

It’s important to understand that, during contested divorces that require court intervention, the state of Tennessee utilizes the equitable distribution law. Essentially, this requires the courts to consider a number of factors as a means of dividing assets fairly, rather than evenly.

In high-net-worth divorces, equitable distribution typically becomes more complicated because the courts must consider a number of complex factors, like property issues, the growth of investment accounts, and business interests.

Tennessee Equitable Distribution Considerations

• Fair distribution does not always mean assets are split equally between the spouses
• Separate property is not subject to division
• However, the appreciation of separate assets during the marriage may be contested
• Disputes regarding business valuation are not uncommon
• Courts will consider several statutory factors when determining equitable distribution outcomes
• Income disparity between spouses may influence alimony discussions

What Assets Can Be Included in a Shelby County High-Net-Worth Divorce?

When a married couple goes through the divorce process, they will have to assess and divide their marital assets. In a high-net-worth divorce, there are a lot more assets at stake than in a typical divorce.

Assets Commonly Divided During High-Net-Worth Divorces

• Business ownership and partnerships
• Real estate
• Stocks and bonds
• Stock options and other forms of executive compensation
• Retirement accounts
• Investment accounts
• Pensions
• Benefits
• 401(k)s
• Cars and other vehicles
• Artwork
• Memorabilia
• Jewelry

These high-valued assets can all be included when separating marital assets. However, certain assets are not included when dividing assets.

What Assets Are Not Included When Dividing Marital Assets?

Although many assets can be included in a high net worth divorce, certain assets are off-limits. Certain trusts, trust interests, and property acquired prior to the marriage generally remain separate under Tennessee law, though those assets may become partially marital depending on how they are used or commingled during the marriage. Any belongings that were gifted or inherited are also off the table. However, if there was a prenuptial or postnuptial agreement, these assets could turn into marital property. If they are turned into marital property, they may be split between both parties.

Assets That May Remain Separate

• Certain assets obtained before the marriage
• Individual inheritances
• Gifts received solely by one spouse
• Certain trust interest
• Property deemed as separate through a valid prenuptial agreement
• Certain property is separately maintained in investment accounts

Contact Our Experienced Memphis Divorce Law Firm Today

If you are a high-net-worth individual going through the divorce process, our firm of remarkable lawyers can help ensure your hard-earned assets are protected. It is important to work with the team at Rice Law, as our firm understands the intricate process and complicated aspects of a high-net-worth divorce. We are committed to representing your best interests and ensuring favorable results. Contact our dedicated legal team today to learn how we can help you.