High Net-Worth Divorce in Connecticut
High net worth divorces can get complicated when it comes to property division, alimony, child support, and other financial aspects. Because of this added complexity, choosing a divorce attorney experienced in the division of high-net-worth assets, rather than simply a family law “generalist”, is crucial.
Financially complex divorce cases often occur when one of the spouses:
- Is an entrepreneur, business owner, doctor, lawyer, CPA, or a partner in their own practice
- Is an executive with complex benefit plans like stock options, RSUs, ESOPs, or a deferred compensation plan
- Has a compensation structure closely tied to bonuses instead of base salary
- Has received (or expects to receive) a valuable inheritance
- Has a self-funded trust or is the beneficiary of a trust
If any of these circumstances apply to you or your spouse, it is vital to ensure that your divorce lawyer has sufficient experience with similar cases.
In Connecticut, a spouse may file for alimony if they were dependent on the other spouse during the marriage. A typical example of this situation is when one of the spouses had been the primary wage earner while the other spent most of their time caring for children or other dependents. In such cases, family law courts will typically rule that the higher-earning spouse must provide financial support post-divorce.
Alimony can be straightforward enough if the couples’ primary income stems from a base salary. However, many high-worth individuals make a substantial part of their earnings through bonuses, commissions, and other fluctuating income structures. If this pertains to your situation, the help of an experienced legal team is invaluable in negotiating fair alimony.
The state of Connecticut follows specific guidelines when awarding child support. However, these guidelines only apply if the combined net income of both parents is under $4,000 a week—and the judge can still rule differently than usual, based on specific circumstances.
If the parents’ net weekly income combined is higher than $4,000, each child support ruling becomes highly individual, with no strict standard.
Typical child support payments include expenses like food, housing, medical care, and school fees. However, children from high-income families may have become accustomed to a more affluent lifestyle that features high-end clothing, expensive vacations, private tuition, and costly extracurricular activities. In child support rulings, courts will typically approve sums that support the children’s standard of living before the divorce.
High net worth couples often own different types of property, some of it possibly overseas. In such cases, property division becomes far more challenging than it would be for your average couple with a single-family house and one joint bank account.
If a prenuptial agreement is in place, it will influence what happens during property division. Otherwise, Connecticut operates as an “all property” state, which generally means that a family law court considers all property and assets of each spouse as marital property. That includes stock options, pensions, deferred comp, trust assets, and even inheritance or gifts.
In some cases, the court won’t consider property divisible, for example, when one of the spouses expects an inheritance but hasn’t received it yet.
Then comes the issue of property valuation—which can be tricky with assets like stocks and international property—and property division.
Property distribution in Connecticut
Connecticut family courts follow an “equitable distribution” principle. That essentially means that the judge has broad authority to rule according to his or her perception of what would be fair in the individual case, based on factors such as both spouses’ financial situation, the length of the marriage, the number and ages of dependent children, and more.
It’s hard to know in advance how the judge will rule if the couple hasn’t negotiated an out-of-court divorce agreement.
The Advantages of an Out-of-Court Agreement
The optimal way to settle financial disputes during a high-end divorce is for both parties to work together with their lawyers to reach an out-of-court divorce agreement. Such an agreement offers more control, more predictability, and a lot less wasted time and energy for all sides involved. It may also result in lower legal fees as there is no need for a complex and drawn-out legal battle.
A divorce agreement helps both sides avoid future conflicts regarding alimony, child support, or other financial matters. A knowledgeable divorce lawyer can help you resolve disputes and draft an agreement that suits both spouses.
Take the Next Steps with Freed Marcroft
For more information about Connecticut divorce and family law, check out our Divorce Information and Facts. If you have questions or want to learn more about how our team of divorce attorneys can help you with your custody or post-judgment issue, please contact us here.
Copyright © 2021. Freed Marcroft. All rights reserved.
The information in this blog post (“post”) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.
Freed Marcroft LLC
419 Main Street
Hartford, CT 06103