“The more you have, the more room there is for disagreement,” says Judge T.E. Cauthorn, founder of Cauthorn Nohr & Owen. “The devil is in the details. You might not be interested in fighting litigation, but it may be in your best financial interest to do so.”
If divorce is inevitable, you need the answer to some important questions. The first –– What do you have? –– should be the easiest. It’s usually not. Other issues are how spousal support applies and what is best for the children.
For many, mediation can be a useful tool of conflict resolution. A mediator doesn’t dictate an outcome, but simply facilitates the conversation until the litigants and their attorneys can resolve the issues themselves.
If you’re starting the process of divorce, here are three important steps to consider:
Create a marital balance sheet. A marital balance sheet is the most important document in a divorce. It lists all your assets and liabilities, and is certain to be used by the court in most high-net-worth divorces. The balance sheet should answer the question, “What does it cost to live the life you are living?” Especially important in high-net-worth divorces are incomes (Be prepared to hire a forensic accountant to determine the true amount); household costs; travel expenses; private-school tuition, anticipated college costs, and all other living expenses.
Pick a “start” date for your marital balance sheet. Without a mutually agreed upon date that ends the sharing of assets, the numbers would continue to change, making accurate information impossible to obtain. This is the date that values will be determined for stocks, 401Ks, salaries, appraised values of possessions and all other financial assets. When the date is selected, you can begin to divide assets and possessions.
Mentally prepare yourself for change. All cases have ups and downs, ebbs and flows, but spousal support is one of the most common points of dispute. Spousal support is financial assistance for your partner’s contribution to the marriage. If you are the primary earner in your marriage, you must emotionally prepare yourself for conflict.
“High-net-worth divorces are especially difficult due to the high level of assets and liabilities,” Judge Cauthorn says. “We don’t shy away from cases like these, no matter the complexity. No case is the same, but one thing applies to all: You’ll need a good lawyer who is not afraid to step up to the plate for you.”