A high net worth divorce case involves property and estates that have a high monetary value.
In the past two years, owing largely to the pandemic, there has been an exponential surge in divorce cases in Australia. Due to frequent lockdowns and the sudden, unwelcome shift in the dynamics of the household, many people have been forced to separate from each other.
A divorce case in itself can get very complicated. Lawyers have the responsibility to duly consider each party’s individual circumstances and to navigate through the divorce process very diligently.
However, divorce cases can become particularly complicated when they involve high-net-worth individuals.
A high net worth divorce case involves financially sophisticated persons. In these types of divorce cases, all the property owned by the couple has a significantly high monetary value.
In high net worth divorce cases, this monetary value of property typically exceeds one million dollars – on the lower end. High net worth divorce cases can also involve property and assets with a valuation of more than 100 million dollars.
In 2018, when Jeff Bezos and Mackenzie Bezos got divorced, Mackenzie Bezos received 25 percent of Amazon’s shares as part of the divorce settlement. This amounts to more than 35 billion USD. This is one of the most famous examples of a high net worth divorce.
Closer to home, Section 121 of the Family Law Act prohibits the publications of divorce proceedings where the parties that are involved are identifiable. But, Australia has had a fair share of high-profile divorce cases, including the billionaire media mogul, Rupert Murdoch’s divorce.
High Net Worth Divorce Case And Property Settlement
In the legal industry, it is widely understood that property division is the most disputable stage in divorce proceedings.
In Australia, a five-step approach – as stated in the Family Law Act 1975 – is used to determine the division of assets in the event of a divorce or separation.
- Identifying every asset and liability
Generally, these include property, savings, loans, and mortgages. For high net worth divorce cases there are many more assets and liabilities to consider, including – stocks, investments, businesses, collections, and intellectual property.
2. Evaluating the existing division of assets
In certain cases, the involved parties will be satisfied with the existing division of assets. However, in high net worth divorce cases, there is always a need to adjust the division of assets, to make it more equitable.
3. Assessing the contributions
Once the process to divide assets begins, lawyers need to gauge the contributions made by both parties to the total asset pool.
In doing so, both financial and non-financial contributions are assessed. Financial contributions include income, whereas taking care of the home, and children makes up non-financial contributions.
4. Estimating future needs of both parties
Factors like the age of the spouse, mental capacity and health of the spouse, future earning capacity, and custody of children are taken into account to estimate the future financial needs of both parties.
5. Ascertaining if proposed orders are equitable
Lastly, the court will check if the proposed division of assets is fair and just, and will aim to effectively end the financial relationship between the two parties, with the intent of creating certainty for the future for both parties.
The Legal Solution
Reaching a settlement in a high net worth divorce case will take significantly longer than a typical divorce case. High net worth divorce cases have the potential to become long drawn-out court battles.
This happens because it often becomes difficult to identify assets, especially when a high-net-worth individual owned the property prior to the marriage.
The assets involved in high net worth divorce cases are less straightforward because it includes large estates, foreign investments, or assets that require special evaluations.
Moreover, high net worth divorce cases can attract unwanted media and public attention. It is important to sign a confidentiality agreement to make sure that any information that the parties have gained through this process remains concealed.
These legal issues can cause a hindrance to the divorce proceedings and addressing these issues as quickly and efficiently as possible is needed not only to expedite the settlement process but also to mitigate the impact of stress.
The experienced lawyers at JB Solicitors can help draw up a confidentiality agreement between parties and can provide efficient legal advice on property settlement matters, and all issues that arise in high-net-worth cases.
If you have any queries, contact JB Solicitors and have a confidential chat with our friendly family lawyers. Alternatively, you can call us on 1300 287 911.