Introduction
HNW is High Net
Worth. Many definitions of High Net Worth Individuals can be found, but a reasonably
neutral meaning is from “Investopedia.com.”
- A
high-net-worth individual (HNWI) is somebody with around $1 million in
liquid financial assets.
- HNWIs
are in high demand by private wealth managers. The more money a person has,
the more work it takes to maintain and preserve those assets.
- The
United States had the most HNWIs in the world at more than 5.28 million in
2017, according to this site.
For the record,
an “Ultra High Net Worth Individual (UHNWI) has in excess of $30 million in
investable assets. “UHNWIs
comprise the wealthiest people in the world and control a disproportionate
amount of global wealth. Although they constitute only .003% of the world’s
total population, they hold approximately 13% of the world's total wealth.
Ultra-high net worth is generally quoted in terms of liquid assets over a
certain figure, but the exact amount differs by financial institution and
region.”[1]
The Uncontested Divorce
HNWIs and UHNWIs
are not immune to divorce. In a perfect world, every divorce would be amicable
and uncontested. One party files for the divorce. The other party accepts, the
courts process the paperwork with appropriate fees paid, and it’s done. Voilà. Both parties get what they want. The children and
pets go with the spouse of choice, and everyone agrees on who’s paying for
what. Because high net worth divorces are usually not
simple, we see
that there are at least three reasons you need an HNW family attorney to handle
these cases.
The Contested HNW Divorce
(And the 3 Three Reasons for HNW
Attorneys)
Surprisingly,
of the three reasons that HNW individuals need an HNW attorney, it’s not always
about their HNW.
1.
Child
support and spousal/partner support (alimony) choices are more difficult the
more there is at stake.
2.
The
disparity between the “higher earner” and the “stay-at-home” person (without
even addressing genders these days) often makes the discussion and resolution
stickier and more heated.
3.
Emotions
run high, and it’s not about the money.
Child Support and Spousal/Partner
Support
This is a hard one. We suggest knowing some of the
laws before you call your attorney. There are several places to look, but if
you’re in California, you might start with this Orange County Superior Court website,
which also
covers medical issues, education, and a myriad of other questions that relate
to child support. Do your homework on this
website
for Spousal/Partner support. It’s
not a surprise that expectations for who is responsible for the upkeep of two
separate homes become muddier the more money there is to divide.
Disparity Between Higher and Lower Earner
in the Family
One party, generally the higher earner, has a
stronger tie to the assets. Objectivity is difficult. Therefore, HNW attorneys
help by including CPAs, CFPs (Certified Financial Planners), and other
specialized agents (e.g., real estate appraisers, art and jewelry experts,
business valuation professionals) where the HNW person owns many different classes
of items. The goal is that each party to the divorce has a strong sense of
fairness as the proceedings ensue.
It’s Not About the Money
A really good HNW attorney will not assume that the HNW person needs to
spend a lot of their HNW on attorney fees. People with HNW are in the end, just
people. Concerned HNW attorneys understand the emotional wreckage of a divorce,
and try to help the couple wade through the financial sewage while preserving
the feelings of the kids, and the sisters and brothers, moms and dads, (the
kids’ aunts and uncles and grandparents’) without adding more fees than
necessary. Less is more. In fact, by researching the forms
ahead of time, even HNW folks can have context and better questions
for their first meetings with their attorneys.
Conclusion:
High net worth individuals may
have liquid assets well above $1 million, and their divorces may be more
complicated financially. But the most important side of the situation is how
the people involved fare during and after the divorce. Money issues are always
messy. More money makes it messier, but we recommend researching the laws in
your state and county to see where to start. Indeed, HNW attorneys might be
best for HNW individuals, but the good ones will try to help you preserve as much of your assets as
possible. Please let us know
if we can help.
* * *
Disclaimer:
This information outlines a few of the concepts
that surround high net worth individuals as they face divorce. It is not
intended to be, nor should it be construed as legal advice for any particular
situation. Please contact your attorney for more information.
* * *
Author: Daniel R. Gold., Esq.
Mr. Gold was admitted to the State Bar of California and the
United States District Court in 1993. Mr. Gold leads the family law practice at
TLD Law and is certified by the State Bar of California Board of Legal
Specialization as a family law specialist. At this time, there are only
approximately 5% out of 200,000 attorneys practicing state wide, certified to
be specialists.
