High-net-worth couples have marital troubles and often decide to divorce, just like everyone else. Unlike middle- and working-class spouses, however, high-net-worth couples face some unique issues when going through a divorce related to the volume, value, and complexity of their assets. If your divorce presents issues related to high-value assets, it is well worth your while to retain an experienced Maryland divorce lawyer.
One such high-net-worth divorcing couple is rappers Offset and Cardi B. In May, headlines revealed that the husband had amended his response to the wife’s 2024 divorce filing, asking for alimony. On the surface, that might seem surprising given that Offset is worth somewhere between $26 and $32 million. However, Cardi B is worth more than $100 million, which makes Offset’s argument look more plausible.
When you have to navigate a Maryland divorce where both of you are high-net-worth individuals, you probably will not have to deal with a catalog of hit songs and albums. Nevertheless, there are certain things that high-net-worth individuals need to keep in mind when going through a divorce.
1. Equitable Distribution and Real Estate Assets
Like almost all couples, high-net-worth couples must undergo an equitable splitting of their marital assets. Note that equitable does not necessarily mean a 50/50 split; instead, Maryland courts look at numerous factors in dividing assets.
Couples with lesser wealth might own no real estate at all, or perhaps own only their marital residence. High-net-worth couples often own a diverse range of real estate holdings, including not just a primary residence, but also investment properties and vacation homes. These properties frequently have significant value, but the exact amount may be unclear. Reaching an equitable distribution of these assets may require a neutral professional to assess the value of each property, including the primary residence.
It may also require a neutral, third-party “trustee” who will manage the sale of properties that the court orders to be sold.
2. Businesses
Spouses with high net worth are more likely to own all or part of a business (or businesses). If they do, then the value of those business interests will impact what the court decides in terms of equitable distribution.
Valuing a business is often more complex than assessing the worth of a vacation home. It requires ascertaining the business’s tangible and intangible assets, making determinations about its cash flow, profitability, and projected future earnings. Often, valuing a business requires the specialized knowledge of an industry or economic expert.
3. Hidden Wealth
Some high-net-worth spouses will go to great (and sometimes illegal) lengths to hold onto what they have. That may include concealing wealth from their spouse and the court in their divorce case. Although Maryland law outlines specific requirements for financial disclosures and the level of detail they must include, some spouses still attempt to conceal assets. This may involve moving wealth into offshore accounts, particularly in specific countries like the Cayman Islands, Switzerland, or Nevis.
If you believe your spouse has hidden assets, you and your legal counsel may choose to retain a forensic accounting expert to uncover that concealed wealth.
4. Tax implications
Like many divorces, a high-net-worth divorce may require the sale of certain assets or transfers related to retirement accounts. Unlike most divorces, the sale of an asset in a high-net-worth divorce may have significant tax implications, such as capital gains taxes. Retirement account transfers and alimony payments — especially if they are large sums — may also have substantial tax implications. By working with an experienced divorce lawyer and, when necessary, tax experts, you can navigate the divorce process in a way that minimizes negative tax consequences.
Any divorce can present challenges. Those complexities are often multiplied when an extensive portfolio of wealth or high-value assets is involved. If you are facing this kind of specialized divorce, get in touch with the skilled Maryland family law attorneys at Anthony A. Fatemi, LLC. Our team has developed winning strategies to help you exit your divorce with the fullest and fairest possible resolution. Contact us today at 301-519-2801 or use our online form to learn how we can assist you.