High Net Worth and Assets

As the Illinois spousal maintenance guidelines trigger only when a judge determines that maintenance is appropriate and a couple has a combined gross income of less than $500,000. When a married couple is of considerably high net worth and commands a much larger income, then there can be numerous complications concerning virtually all aspects of their divorce.

High net worth couples will often share significant marital assets and multiple income sources, which leads to a far more complex divorce. Such cases may require business valuations, multiple real estate properties, sophisticated tax structures, and far higher standards of living for spouses.  

There will need to be a proper valuation of the assets of both parties in a high net worth divorce, and the more assets a couple has means more expertise and time will be required to determine their values and also that there is more likely to be disputes over the values of the assets. Any individual who is preparing to enter a high net worth divorce will want to make sure they are working with a skilled divorce attorney who has experience with many of the complex and individualized issues that can arise in high net worth divorces.  

Division of Marital Property in High Net Worth Divorces

The Illinois Marriage and Dissolution of Marriage Act in 750 Illinois Compiled Statutes 5 dictates that all marital property needs to be divided in an equitable manner. An equitable division of marital property is not necessarily an equal division, although it may certainly work out that way in some cases.

High net worth divorces can be more complex because the nature of the assets owned can be much more complicated than in a traditional divorce Common kinds of assets that can create complexities  include:

• Real estate holdings, including limited partnerships
• Offshore accounts and International assets
• Assets that include both marital and non-marital components 
• Investment accounts
• Land trusts
• Revocable and irrevocable trusts and other sophisticated estate planning agreements
• 401(k) plans and retirement accounts
• Tax considerations
• Executive compensation and Deferred Compensation
• Businesses and business interests including those without a readily ascertainable value or in which a minority interest is owned
• Closely held businesses in which there have been intra-owner/family transfers of ownership interests
• Inheritances
• Complex debts and liabilities
• Art, antiques, and other valuable collectibles
• Unique assets

It can often be difficult for divorcing spouses in a high net worth case to arrive at an equitable division of marital property, so litigation commonly results in these cases. Michael C. Craven, Divorce Lawyers Chicago can utilize services and incorporate opinions of many respected industry experts such as forensic accountants who can uncover hidden assets, business evaluators who can assess business holdings, and vocational experts who can determine whether alimony is justified for a non-working or underemployed spouse.

Spousal Maintenance for High Net Worth Divorces

The standard spousal maintenance guidelines typically do not apply to high net worth divorces since couples often have salaries of far more than $500,000, the threshold at which standard statutory guidelines no longer apply. While spousal support is never a guarantee in any divorce case, it will be important to accurately gauge the incomes of both spouses, as well as the assets allocated to each,  in a high net worth divorce so a court can make a proper determination.

While a court will not rely on the spousal maintenance formula for high asset divorces, it still considers many of the same factors when rendering a decision about whether to award spousal maintenance. Illinois law dictates that a decision on spousal support payments should involve the following factors in determining whether spousal maintenance is appropriate:

• The income and property of each spouse
• The individual needs of each spouse
• The respective earning capacities of each spouse
• Whether one spouse devoted time to domestic duties preventing them from acquiring education, training, or employment that could impact their present and future earning capacity
• The amount of time one spouse would need to acquire the education, training, or employment necessary to support themselves without spousal maintenance
• The contributions by one spouse to the other spouse’s education, training, or career enhancement that may have impacted that spouse’s present or future earning capacity
• The standard of living applicable to both spouses during the marriage
• The duration of the marriage
• The respective ages of the spouses
• Physical and emotional health of both spouses
• Tax implications property division has upon both spouses
• Any agreement between the spouses about spousal maintenance

When a court decides that spousal maintenance is appropriate for a case in which the parties have a combined income of more than $500,000, the court will consider many of these factors when deciding the amount of support. 

In high net worth cases, there is potential to award the less advantaged spouse a larger share of the assets in lieu of or to reduce alimony. In these situations, the nature of the assets will be important. For example, it is more likely to award assets to lieu of maintenance in cases where the assets are income-producing. 

Child Support in High Net Worth Divorces

Calculations of child support payments usually involve the “income shares” method in Illinois. An income shares model uses the incomes of both parents and how much time they spend with a child to determine which parent will make payments and how much those payments will be. 

If one or both parents have large incomes, the income shares formula may not apply. In such cases, a judge could consider such factors as the following when they are setting payments:

• The income of each parent as well as their other financial resources
• The financial needs of each parent
• The child’s needs, such as supplemental medical or educational resources they might require
• The standard of living a child would have experienced if the parents had stayed together

Hidden Assets in High Net Worth Divorces

Both spouses in high net worth divorces can be tempted to hide assets to avoid having to divide them. There are numerous tactics spouses use in these types of cases. A spouse may sell certain assets to a friend or family member only to regain the same property after the divorce is complete, use a business or professional practice to hide income or assets, or use the Internal Revenue Service (IRS) to shield assets from division during divorce by overpaying taxes and reaping large refunds in the future. 

Additionally, there are legitimate practices that are done without a deceitful motive that may add complexity to discovering, valuing, or accessing marital assets. These include estate planning techniques created to save taxes and/or pass or retain wealth in a family.  

A few of the most common signs that a spouse may be attempting to hide assets or lie about finances during a divorce include:

• Secretive Behavior — You should be concerned when a spouse begins hiding financial documents, changes their online banking passwords, deletes computer files, begins rerouting personal mail to a P.O. box, or otherwise becomes secretive about numerous financial concerns.
• Refusal to Discuss Finances — One of the first and clearest signs of a problem can often be a spouse simply opting not to talk about financial issues. While they may claim that it is a matter of personal privacy, they should still be willing to discuss some of the relevant issues with you.
• Sudden Requests to Sign Documents You Do Not Understand — If your spouse is coming to you needing your signature on something immediately and does not give you adequate time to review the document or at least have your lawyer read it, that is also a red flag. You should never sign anything that you do not fully understand.
• Sudden Losses in Income or Business Revenue — When your spouse was boasting about how well a business was doing during your marriage but is now claiming that the company is floundering, it may be a sign of possible deception about the company’s value or performance when it comes to asset division.
• Unusual Financial Transactions — If your spouse is suddenly purchasing expensive luxury items, giving money to friends or family, or conducting unusual financial transactions, these could all be signs they are getting ready to try and hide their assets.
• Frequent Cash Withdrawals — One of the easiest ways for a spouse to reduce their assets is to hide large amounts of cash because there is very little record of cash on hand. A spouse who is withdrawing money more frequently or in larger amounts may very well be attempting to take this route.
• Settling Unknown Debts — When a spouse is suddenly expressing concern about paying back a loan you knew nothing about, then there is the chance that they are creating a fraudulent claim to try and disguise hiding money.

Contact An Experienced Chicago High Net Worth Divorce Lawyer

When you are preparing to enter what will be a high net worth divorce, it will be critical for you to make sure you have fully qualified legal representation on your side. Michael C. Craven has handled scores of high net worth divorce cases in the Chicago area and knows how to achieve the most favorable outcomes to these cases in the most reasonable amount of time so you are not forced to deal with seemingly never-ending litigation.

You can review some of the many testimonials we have from our clients on our website, as well as several peer recognitions to get a better feel of the quality of the work we have provided. Our firm understands that every single case is different, and we will take the time to thoroughly investigate every detail in your case so you can know that you are seeking individualized attention.

You can call (312) 621-5234 today or contact us here to schedule an initial consultation in which we can further discuss your case. Michael C. Craven, Divorce Lawyers Chicago represents clients in Chicago and many other surrounding areas, such as Evanston, Deerfield, Highwood, Glencoe, Northbrook, Lake Forest, and several other communities in Cook County.