Billionaire philanthropists Bill and Melinda Gates, who share a net worth of around $130 billion, announced on April 4 that they will end their 27-year marriage. Known together for their work at the Bill and Melinda Gates Foundation, a nonprofit that promotes a variety of philanthropic initiatives in impoverished countries, the couple’s high-asset divorce will likely ensure that both will retain an 11-figure net worth.
Not all high-asset divorces involve as much wealth as the Gates couple’s does – or nearly even that amount. Typically, a divorce is considered to be a high-asset divorce when at least $1 million in liquid assets is involved. These assets could comprise of real estate, business interests, securities, and other property that can be easily converted into cash. Because of high property values, many married couples in California could actually come very close to reaching this threshold.
How Are High-Asset Divorces Different?
When a couple shares a high net worth, the divorce process can be a lot different compared to those with fewer than $1 million in liquid assets.
It Can Take More Time
Because high-asset divorces are often complex, it can take the spouses’ attorneys a lot of time in negotiations and litigation before a settlement is reached. Decisions will need to be made about what to do with real estate, business interests, and other investments. Disentangling these assets from one another – and each spouse’s financial life from the other – can simply take a lot of time due to its sheer complexity.
It Can Cost More Money
The complexity of dividing a high-asset marital estate can also mean it’ll cost more money. First, because the whole process can take a lot of time, a lot of money can be spent on court costs and attorney’s fees. Then, consultants may be required to assist with accounting, tax planning, restricting businesses, and a number of other issues that wouldn’t apply for a less wealthy couple during divorce.
Taxation Is a Considerable Factor
Spouses involved in a high-asset divorce are probably both keen on minimizing how much wealth is lost through taxation. If a couple owns multiple pieces of real estate, for example, selling off any of these properties and splitting the proceeds can have greater consequences for capital gains taxes.
Typically, a tax consultant – or even a small team of them – will be hired to advise on the potential tax consequences for a number of issues throughout the divorce.
Spousal Support May or May Not Be Relevant
Although Melinda Gates declined to seek spousal support, spouses involved in a high-asset divorce can pursue it – even if property division would ensure both remain billionaires when the dust settles.
If spousal support is desired, the court will take the following into consideration:
- Each spouse’s current income
- Earning potential of each spouse
- Length of the marriage
- Relative assets and liabilities for each spouse
- What each spouse contributed to the marriage
- Tax consequences
There are many other factors the court could evaluate to determine spousal support in a high-asset divorce. These are just a few to convey the fact that the court is ultimately seeking to making a finding that is relevant and equitable to the situation.
Do You Need Legal Assistance?
If you and your spouse share a high net worth, but divorce is on the horizon, secure the legal representation you need to help you with this complicated matter. We at Claery & Hammond, LLP are here to help.
Learn more about our legal services and how we can assist you with the complexities of a high-asset divorce by scheduling a consultation with Claery & Hammond, LLP today.