If I Have a High Net Worth, How Do I Protect My Assets in a North Carolina Divorce?
Going through a divorce in North Carolina is rarely easy, but it can be even more worrisome when you have an extremely high net worth. We have all heard the horror stories about spouses losing entire fortunes in a messy divorce, and you should obviously do everything in your power to protect your hard-earned assets as you approach your separation. What is the best way to go about this? What kinds of steps can you take to ensure that your former spouse is not walking away with an unfair share of your fortune, your business, or your property?
Clearly, your first step should be to enlist the help of a qualified divorce lawyer who specializes in this specific area of law. With an experienced attorney by your side, you can avoid needlessly throwing away your assets, and you can keep hold of what is rightfully yours. An expert attorney can utilize a number of effective strategies to help you, but what does this actually look like in the courtroom? Let’s explore some of the factors at play.Reasonable Needs for Child Support Change
When a judge approaches a child support case involving parents with high incomes, the “reasonable needs” of a child change. In this situation, a child might have become accustomed to things like private school tuition, employment of a nanny, or even expensive hobbies like horseback riding. Because a child may rely on these things for their overall quality of life, a judge may set child support accordingly.Marital Property vs. Separate Property
If you are worried about losing your assets as a result of your divorce, you can take heart in the fact that North Carolina law offers you a strong degree of protection. In the Tar Heel State, assets in a divorce are divided into three sections — marital property, separate property, and divisible property:
- Marital Property: If you acquired property over the course of your marriage, it is considered “marital property” (unless it was acquired by gift or inheritance). This includes pensions, deferred compensation, and any other assets you might have acquired between the date of your marriage and the date of your separation.
- Separate Property: All of the assets you acquired prior to the marriage are classified as “separate property.” In addition, assets acquired by devise (left to you in a will), descent, or as a gift also fall into this category - whether you acquired them during the marriage or not. Any increase in value of these assets is also considered separate property.
- Divisible Property: means all real and personal property as set forth below:
- All appreciation and diminution in value of marital property and divisible property of the parties occurring after the date of separation and prior to the date of distribution, except that appreciation or diminution in value which is the result of postseparation actions or activities of a spouse shall not be treated as divisible property.
- All property, property rights, or any portion thereof received after the date of separation but before the date of distribution that was acquired as a result of the efforts of either spouse during the marriage and before the date of separation, including, but not limited to, commissions, bonuses, and contractual rights.
- Passive income from marital property received after the date of separation, including, but not limited to, interest and dividends.
- Passive increases and passive decreases in marital debt and financing charges and interest related to marital debt.
Understanding the difference between these two types of property is important because they are divided differently in a divorce. Separate property remains yours, and it is never divided. On the other hand, marital property and divisible property is subject to equitable distribution, which means it will be split in a fair manner between the former spouses. As you can probably tell, it is important to keep separate property separate throughout the marriage, especially if you want to keep hold of it after a divorce. “Commingling” separate assets with marital assets can cause complications in high net worth divorces.Alimony and Spousal Support May be Easier Than You Think
Spousal support and alimony represent major issues in most divorces, but this hurdle is often easily overcome when both spouses earn a substantial income. Simply put, there is no need for one spouse to support the other when both parties earn more than enough to live on for the rest of their lives.
On the other hand, your situation might be quite different. When one spouse is earning much more than the other, spousal support can be difficult to calculate. Perhaps one spouse had been a stay-at-home parent, while the other was earning a seven-figure salary. In this case, the judge would take into account a number of factors, including the standard of living the spouse has become accustomed to, any misconduct by either spouse, the length of the marriage, and the capability of the dependent spouse to earn their own living (based on educational qualifications, etc.)The Importance of a Qualified Divorce Attorney
When you head to family court at the county courthouse, you will feel much more confident about your upcoming divorce with an experienced local divorce attorney by your side. Reach out to Arnold & Smith, PLLC today at 704-370-2828. Get help throughout the Charlotte region at one of our conveniently located offices in uptown Charlotte, Monroe and Mooresville.