One of the most important yet contentious topics during a divorce case is spousal support. Determining alimony is often a complicated process, but it can be even more complex if one or both of the spouses have a high net worth. Understanding the factors that are considered when determining spousal support is crucial in ensuring that your legal rights are protected. Work with an experienced Farmington Hills divorce lawyer for skilled representation and legal advice during your case.
What is Alimony?
Alimony is a financial obligation that one spouse pays to the other during a separation or divorce to provide ongoing support. Also known as spousal support, alimony is a court-ordered payment that ensures the divorce does not have a significantly negative effect on the lower-earning spouse.
Alimony can serve a variety of purposes, including the following and more.
- Providing temporary financial support during the separation process
- Allowing the lower-earning spouse to maintain a similar standard of living post-divorce
- Reimbursing one spouse for contributions like sacrificing their career or education or supporting the other spouse to allow them to earn a higher degree
- Giving the lower-earning spouse time to became financially independent
What is Considered a High Net-Worth Divorce?
A divorce can be considered high net-worth when the couple has a combined net worth of $1 million or more. These types of couples generally have significant amounts of assets spread out over a variety of endeavors. Their net worth could come from salary, self-employment, business ownership, investments, stocks, real estate, etc.
High net worth divorces are often more complex than cases where the couple has an average financial status. This is especially true when there is a large disparity between each spouse’s income and earning potential.
What Factors Affect Alimony in a High Net-Worth Divorce?
The factors that affect alimony decisions in a high net-worth divorce are similar to those considered in any other case. However, the situation is likely more complex because of the significant amount of financial assets and considerations.
When a court determines spousal support in a high net-worth divorce, the following are evaluated.
- The length of the marirage
- The age and health of each spouse
- Each spouse’s current and future earning potential
- The standard of living established during the marriage
- Pre and post-nuptial agreements
- Tax implications
- Non-financial contributions made to the relationship
- Property and debt division
- Each spouse’s financial portfolio, including investments, trusts, businesses, etc.
In a high net-worth divorce case, the judge generally has the discretion to determine the amount and duration of alimony that is required. By using the above factors, they can more accurately decide what the lower-earning spouse deserves and the terms of the financial obligation.
Understanding how alimony and other important issues are handled during a high net worth divorce is crucial to ensure your rights are protected. Consult with a skilled attorney today for more information and legal advice.