Pitfalls of Determining Spousal Maintenance In a High Net Worth Divorce

While wealth brings financial freedom, it can create unusual complexities at the unexpected end of a marriage.

When it comes to a high net worth divorce, spousal support payments can be a major part of the conversation. Spousal maintenance, also called alimony or spousal support, is a court-ordered payment from one spouse to another to provide for living expenses and often to make up for inequities in income that may persist after a divorce.

Determining appropriate spousal maintenance ensures that both the payor spouse and the payee spouse (the receiver) have sufficient income to live independently, even if their incomes have been dramatically different over the years.

Dividing marital property can be a difficult venture in any case, and deciding whether to pursue spousal maintenance in addition adds yet another layer of complexity, particularly for those with significant incomes.

Who is high net worth? Incomes over $400K annually, and/or a net worth of over $2 million, are often considered “high net worth.”

At Alithis Family Law, we work hard to ensure alimony payments make sense for your situation: whether you’re the payor or the payee.

Spousal maintenance in high net worth divorces can be particularly difficult, and in this article we’ll take a look at:

• The role of alimony in a high net worth divorce

• When alimony is awarded for high net worth spouses

• How maintenance is calculated in high net worth divorces

• How long spousal maintenance can last

• The types of spousal maintenance in high net worth divorces 

  

What Role Does Alimony Play in a Divorce?

Calculating spousal maintenance is often an important financial consideration in your divorce, along with child support and property division.

While you may have lived comfortably on your combined annual incomes as spouses, spousal support may be awarded after a divorce if either partner expects to see a major adjustment in their ability to support themselves. 

• For example, your spouse may have been a home-maker while you supported the family on a significant income

• One spouse may be accustomed to a particular lifestyle that isn’t realistic on their income alone due to income disparities during the marriage

When a working spouse has a high gross income and was the primary breadwinner in the family, it can leave the other spouse struggling to support themselves during or after a divorce, especially as they try to seek employment with less education, training, or a long employment record.

In these cases, the higher earning spouse may be expected to pay alimony or maintenance payments until the latter spouse becomes self supporting. This is called temporary spousal maintenance. Spousal maintenance can also be permanent.

If you’re seeking alimony payments, or defending against an egregious request, an experienced spousal support lawyer can be key in determining appropriate and fair spousal maintenance.

Reducing Your Exposure to – or Making the Case For – Spousal Maintenance

The most contentious divorce proceedings on which we work often involve significant assets that are hard to divide, in addition to expectations or the need for financial support from one party to the other.

This is common when:

• One spouse has stayed home to raise children or take care of the home, giving up career advancement

• One spouse has lower income than the other spouse, but is clearly used to a high standard of living

• Marital misconduct is a major concern

• One spouse has a higher gross income and there is not sufficient property or liquid assets to provide for the lower earning spouse

• There is a significant amount of money involved!

High net worth divorces are notorious for more discerning and challenging alimony situations. Why?

A High Standard of Living

Both spouses may be used to a high standard of living: frequent shopping trips, frequent vacations, extravagant home furnishings, and more. With the loss of dual incomes, or the loss of a primary breadwinner in the family, the adjustment can be a challenge.

More Assets or Income-Producing Assets

It is common for those with higher incomes to also accumulate significant assets that may be desirable for both parties during the divorce. That might include income-producing assets, like rental property. How to divide assets during a divorce can play a role in how much spousal maintenance is appropriate as well.

Business Ownership Complicates Income

What if your income is linked to you ownership of a business, but your business is about to be divided as part of the divorce proceedings?

Again, business ownership and success are a commonality in high asset divorces and high gross incomes. When a business is at stake during a divorce, and may even be divided or sold, what will alimony look like under this new regime?

Ultimately, high asset divorces can be some of the most contentious, and spousal maintenance is no different.

How Is Alimony Calculated in High Net Worth Divorces?

There is no single calculator for spousal maintenance in Minnesota, and a variety of factors will affect the outcome of your case.

In high net worth divorces in particular, a judge may have discretionary authority on these concerns, setting the amount received through a spousal maintenance order based on relevant factors such as:

• Property division

• Career prospects and employment skills

• Current and future earnings of each spouse

• Child custody, especially if the child needs personal supervision that impacts the parent’s ability to work 

• The length of the marriage

• Physical or mental health concerns

While spousal maintenance is meant to help a spouse who may be left in a difficult position after a divorce ensure they have reliable support, expectations may be adjusted for those in a high net worth divorce. You may need an experienced divorce lawyer to navigate these challenges successfully. 

When Will Alimony Be Awarded in a High Net Worth Divorce?

Alimony is typically awarded when the divorce creates uncertainty about whether one spouse will be able to earn sufficient income to support themselves. Typically, alimony is awarded when the divorce is finalized, though there are types of alimony that may be awarded during early during lengthy divorce processes. Temporary alimony may be awarded when you are separated before divorce. Talk to your attorney about your immediate needs if you’re just beginning the divorce process.

This may be determined by financial professionals, but final decisions in the maintenance order are at the sole discretion of the judge. 

Can I Get Alimony Before the Divorce is Final?

Depending on the specifics of your situation, you may be able to get alimony before your divorce is final.

This is called alimony pendente lite. It begins when the divorce is filed and ends with the divorce being legitimized by divorce decree. It may also be called temporary spousal support. Typically, this is a temporary measure for those who may not have the support they need during the separation process. 

Your divorce attorney will be able to give you more specific answers about your case. Your attorney will also take time to ensure you are following state laws and guaranteeing that yo’re getting the maximum amount possible for your specific case.

Is There a Specific Duration of Marriage Required To Receive Spousal Support?

Longer marriages with children involved generally create a stronger case for alimony, though there is no set rule.

A 3-year marriage with no children and both spouses working is not a great case for alimony in either direction.

A 20-year marriage with three kids still at home, and one spouse having spent most of their time raising kids, is a good setting for support payments.

Every situation is different, and an experienced spousal support lawyer can help you decide whether to pursue, and for how much, spousal maintenance.

Contact an Attorney Experienced In High Net Worth Family Law

At Alithis Family Law, we understand that high net worth divorce cases can be complex.

Our team is here to guide you through eventhe most complicated situations, ensuring you have the support and guidance you need.

Call our Minneapolis family law team any time for a free consultation and to learn some basics about what to expect from your divorce case.