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Critical Factors in a High Net Worth Divorce

A New York divorce is considered “high net worth” if the couple has $1 million or more in net liquid assets that are subject to equitable distribution. Often, these couples also have ownership interests in other assets that are difficult to value and split. That alone can make a divorce more complicated, but because the stakes are higher, there are more likely to be contests between the spouses that add to the intrigue. As a result, high net worth divorces can drag out for a long time and be expensive.

One of the main issues to deal with in a high net worth divorce is valuation of diverse assets. These can include investments, executive compensation packages and retirement plans. Ownership interests in businesses can be particularly difficult to value, since stock in a private company does not have a readily ascertainable market worth. In addition, each spouse’s contributions to that business may have a bearing on the division of value.

The same concerns apply to luxury items like boats and high-end cars and to fine art, jewelry and antiques. These assets usually must be appraised by professionals. Appraisals are expensive and often require market research. Sometimes, competing estimates are obtained, which can mean finding a neutral party to settle the difference.

A couple that is dividing valuable and complex assets needs to pay particular attention to tax implications. Some of the questions that may need to be explored include these:

  • Will capital gains tax be triggered if an asset is transferred from joint ownership or ownership by one spouse to the other spouse?
  • If capital gains tax is incurred, who will pay the tax and how does that obligation figure into the overall division of assets?
  • For assets that are held in tax-deferred retirement accounts, can ownership be transferred without losing the tax deferral?
  • If title to real estate is transferred between the spouses, is a state and/or local transfer tax imposed? If it is, which spouse will pay the tax and does that spouse have sufficient liquid assets to pay the tax without selling the real estate?

In addition to property division contests, there can be complex issues of child support and spousal maintenance in a high net worth divorce. New York has guidelines for calculating these types of support, but when a couple’s income exceeds the guideline caps, the judge must use his or her discretion to set payments. The judge will consider many factors, with the goals of protecting children’s best interests and allowing the spouses to maintain a standard of living similar to that enjoyed during the marriage.

If you have questions about high net worth divorce, the Law Offices of Randy S. Margulis is ready to respond. Our offices are located in Williamsville and downtown Buffalo and we represent clients throughout Western New York. Contact us online or call 716-886-9600 to schedule a confidential consultation.

Randy  S.  Margulis Attorney Photo
Randy S. Margulis
Member

As a Buffalo divorce lawyer for 28 years, I have devoted myself to solving the problems that affect families throughout the Buffalo metropolitan area and Western New York. As a family law attorney, I make it my goal to create a partnership of trust with my clients. People put their trust in me to handle cases that can potentially have a long-lasting impact on not only their lives, but the lives of their family as well.

Alexandra M. Rockwood Attorney Photo
Alexandra M. Rockwood
Senior Associate

Alexandra M. Rockwood is a Senior Associate Attorney with the Law Offices of Randy S. Margulis & Associates and has been with the firm since early 2020. She primarily practices in the areas of matrimonial and family law, including divorce, child custody, and child support. Alexandra is a practicing matrimonial and family law attorney as…

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    5.0/5.0

    Divorce is always an unpleasant event and my case was no exception, yet the guidance, professionalism and ethical strategy that Randy Margulis provided was essential in finding the best solutions for my children, my ex-wife and myself. As the proces...

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    5.0/5.0

    Divorce is always an unpleasant event and my case was no exception, yet the guidance, professionalism and ethical strategy that Randy Margulis provided was essential in finding the best solutions for my children, my ex-wife and myself. As the proces...

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    Randy Margulis is knowledgable of Domestic Law, dedicated, responsive, personable, aggressive and effective. I came to him on a friend's recommendation as well as Randy's reputation, and during the initial consultation I liked his approach and track ...

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    Found Mr. Margulis to be a very organized and professional individual to work with. He is well-respected by his peers and is spoken of highly, I believe this helped with my divorce and made things go smoothly. I would highly recommend his services ...

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    Randy is very firm and effective in court while empathetic to his clients. I am a domestic violence victim, and Randy made me feel safe and protected. My financial award was more than I envisioned it to be when I started my divorce. I can't thank ...

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