Divorces are never easy, but high-net-worth divorces pose unique challenges. Not only are there often substantial assets at stake, but there may also be complex business interests, real estate holdings, and investment portfolios to consider. That’s in addition to any child-related and parenting issues that must also be addressed for the children of the marriage. In South Carolina, navigating these complex divorce proceedings requires a deep understanding of our state’s laws and practices, as well as a strong background in financial literacy, business operations, and tax implications of family court orders on business owners and investors. In this post, we’ll explore what those who are facing this possibility need to know about high-net-worth divorce in South Carolina to protect their interests.
Understand How Equitable Distribution Laws Affect Your Case
South Carolina operates under the legal theory of equitable distribution, meaning that all marital assets and debts are divided in a manner that is fair (although not always equal) to both parties. This does not necessarily mean a 50/50 split, and the court will weigh factors such as each spouse’s contributions to the marital assets, earning potential, and financial needs in reaching a distribution decision. In high-net-worth divorces, it’s important to have a divorce lawyer who is experienced in navigating these complex and nuanced laws to ensure a fair and equitable division of assets.
Understand How to Best Protect Your Assets
In order to minimize the potential financial damage of a high-net-worth divorce, it’s important to take steps to protect your assets well before the divorce proceedings begin. One of the best ways to protect your assets is putting protections in place before the marriage even begins through a prenuptial agreement, which can outline the division of assets in the event of a divorce. Of course, this may not be a possibility if you’re already married and your spouse will not agree to sign a postnuptial agreement.
However, if you know the possibility of divorce is on the horizon, don’t take any steps toward transferring or selling your assets without first consulting with an experienced family law attorney. Divorce cases in South Carolina require full financial disclosure before a divorce will be granted by a judge. Therefore, it’s important that any financial moves you make in the months leading up to a divorce are justified and in both parties’ best interests. If your spouse can prove you wasted, hid, or were otherwise unscrupulous in your financial transactions, it may backfire on you in family court with a judge awarding a larger share of the assets to your spouse in the end.
Understand How to Value Your Business Interests
For high-net-worth individuals who own businesses or other professional practices, a divorce can be particularly complicated. In addition to dividing the business assets, there is also the potential for the non-business-owning spouse to claim a share of its future profits through equitable division or other support payments, so it’s important to have a clear understanding of the value of all businesses and professional interests before beginning divorce proceedings.
These valuations must be done by an experienced forensic accounting professional, and they typically involve a deep review of several years’ worth of financial data to properly evaluate the marital portion of the value. This can become more complicated if the owner-spouse has other business partners or shares their professional practice with other professionals. Before agreeing to have your business interest or professional practice valued, talk with your attorney to ensure the valuation professional is someone whose work is known and has routinely been accepted by the family court in your jurisdiction to avoid wasting a lot of time and money on a valuation the Court will not use.
Understand and Consider Tax Implications
High-net-worth divorces also tend to have significant tax implications that go beyond just the typical impacts of a divorce. Additionally, in high-net-worth divorces, there may be significant capital gains taxes associated with the sale or transfer of assets during a divorce, which can impact both the divorcing parties during the following tax year. Also, depending on the agreements made for which assets might be used to equalize the division of assets between the parties if certain types of investment or retirement accounts are transferred or cashed out, those transactions could result in hefty tax and other penalties that drastically reduce their value.
Don’t make any agreements for the transfer or liquidation of any account without fully understanding the implications of the transaction on both parties. While it’s not your or your attorney’s job to find solutions that are “most beneficial” to your spouse in every scenario (that’s the job of your spouse’s attorney), the family court will not look kindly on any action that is, on its face, beneficial only to you and clearly detrimental to your spouse.
Understand and Embrace the Alternative Dispute Resolution Process
In high-net-worth divorces, litigation can be costly, time-consuming, and emotionally exhaustive. Even when you may have the financial resources to avoid a long and costly case, that’s likely not how you imagined spending your hard-earned wealth. That’s why many divorcing couples, regardless of net worth, choose to explore alternative dispute resolution options such as mediation or arbitration.
These methods allow the parties to work together to come up with creative solutions that meet everyone’s needs while avoiding the risks associated with a courtroom trial. In South Carolina, unless certain rare situations exist, all family court cases must be mediated before a trial will be scheduled, so it’s always a good idea to hire an attorney who is willing to prepare your case for a good-faith effort to resolve it in mediation, while also skillfully preparing it for litigation in the courtroom from day one.
Navigating a high-net-worth divorce in South Carolina requires precision, planning, and consistent attention to detail. By partnering with an experienced and well-respected high-net-worth divorce lawyer, protecting your assets, valuing your business interests, considering tax implications, and exploring alternative dispute resolution options, you will be well-positioned to achieve a fair and satisfactory outcome to your divorce proceedings.
If you and your spouse are considering divorce, don’t make any decisions about how to proceed before talking with a trusted attorney in your area. Your divorce and any settlement you create will be subject to your state’s divorce laws. Without discussing your situation with an attorney, your agreement may not be what you want or what is beneficial to your future. If you’re in South Carolina, it’s important to contact an experienced family court attorney like J. Benjamin Stevens today to discuss your specific situation.
Ben Stevens has provided exceptional legal counsel and support to families throughout South Carolina for over twenty-five years, handling all matters of family law, such as prenuptial agreements, divorce, separation, alimony, and child custody. Mr. Stevens is a Fellow in the American Academy of Matrimonial Lawyers and the International Academy of Family Lawyers, and he is a Board-Certified Family Trial Advocate by the National Board of Trial Advocacy. Our firm is well-equipped to handle all divorce and family law matters, no matter your circumstances. Contact our office at (864) 598-9172 or SCFamilyLaw@offitkurman.com to schedule an initial consultation.
Related Articles by Mr. Stevens:
- Understanding the Benefits of Hiring an AAML Fellow for Your South Carolina Divorce
- A Guide to Child Custody Considerations for High-Net-Worth Parents Facing Divorce
- 3 Tips for Public Figures Facing a High-Profile Divorce
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