All divorces are emotionally and financially challenging, but facing a divorce with a large and diverse array of assets to divide under California’s 50/50 community property laws is especially distressing. If you have a high-asset marriage, untangling many bank accounts, investments, valuables, and real estate properties in order to determine which are separate assets and which are community assets subject to division requires both nuance and know-how. Even with the best lawyer and financial experts protecting your interests, it’s hard to successfully navigate a Palo Alto high-net-worth divorce without losing sleep and experiencing high levels of anxiety and stress. So how can you get through both the legal and emotional aspects of a divorce involving many diverse assets without losing your sanity as well as your hard-won assets?
Get a Financial Plan in Place Before You File
The stakes are higher in a high-asset divorce. With a lot to lose, you may have put off an inevitable divorce out of fear of suffering consequences to the lifestyle you’ve worked hard for. Often, there’s an emotional attachment to properties and assets, such as your home and the retirement fund you’ve earned and deserve. The most important step toward minimizing the stress of high-asset divorce in California is to have a carefully crafted financial strategy in place before you file. In high-asset divorces, including a financial expert along with your attorney is a sanity saver. With the help of your attorney and financial experts with experience in navigating a high-asset divorce, such as a Certified Divorce Financial Analyst (CDFA), you’ll minimize the chance of unpleasant surprises and unexpected financial losses. Having a strategy in place for the fair distribution of your assets while protecting your rights and favorable outcomes as the top priority can save you from sleepless nights once you’ve filed the paperwork and the proceedings are underway. In many cases, a solid plan to present to a spouse can also save months of contentious negotiation.
Be Proactive on Support Issues
While it’s true that California uses a formula for calculating child support, the formula is only a basis for a judge’s decision and rarely applies to high-net-worth divorces. When spouses have high incomes and assets, the formula may result in an absurdly high amount of child support that’s far in excess of the children’s needs. Whether you expect to pay or receive child support, it’s essential to your emotional health to ensure that your children have what they need in order to minimize the change to their lifestyle, but the other parent does not need to make a profit in the process.
While child support is for meeting the needs of children, spousal support in California is meant to be a bridge for a gap in income between a higher-earning spouse and a lower-earning spouse. It’s important to consult with your attorney and financial planner before filing divorce papers so you understand your role in spousal support after your divorce. In high-asset divorces with both parties earning high incomes, spousal maintenance payments may not be in order. However, if you or your spouse will suffer a significant change in circumstances after the divorce, a judge is likely to order spousal support. Children who associate their parent’s divorce with a negative change in their parent’s socioeconomic status may suffer long-term emotional consequences.
In the best-case scenario, you and your spouse can negotiate issues of child custody, child support, and spousal support between yourselves to greatly minimize one of the most contentious and stress-related issues in a divorce.
Don’t Neglect Self-Care
Onlookers may assume that those with many assets and a high net worth won’t suffer from the same level of emotional struggles as those with limited financial circumstances. However, the breakup of a marriage and family can take a devastating emotional toll that no financial cushion alone can address. It’s important to take time to speak to close friends and family before and during the divorce and regularly visit a qualified and experienced therapist throughout the process to ensure you have ample coping strategies and a support system in place. If possible, communicate calmly and be willing to compromise with your ex-spouse to reduce anxiety-causing contention. If you and your spouse are willing to put your children’s needs ahead of your own, sessions with a family counselor can reassure your children that their family remains intact despite the divorce— a critical step for the emotional health of all involved.