Going through a divorce can be a traumatic experience, and dividing up the assets, on top of the emotional toll the process takes, can be an added stressor that neither party needs. For high-net-worth couples in particular, it can be tricky to determine what should belong to who, and from properties to investment portfolios, there is a lot to consider.
Back in 2019, Amazon founder and multi-billionaire Jeff Bezos’s high-profile divorce from wife MacKenzie, after 25 years of marriage, made headlines, with the world speculating on who would walk away from it with what. In the end, MacKenzie departed with only a four percent stake in Amazon – but, when you consider that it was worth $38bn (£29 bn) – it suddenly doesn’t sound so bad, and in fact, the figure made the Bezos divorce settlement the largest in history.
Of course, the divorce process can differ depending on where in the world you live, and in the UK, the settlement could have been larger still, with law here requiring a 50/50 split of any assets acquired throughout the course of the marriage. So, in some ways, Jeff lucked out because of a geographical technicality, and MacKenzie, not so much.
Whichever side of the pond you’re on, property, business shares and pensions are just some of the factors you’ll need to consider when going through a high-net-worth divorce. Here, we take a look at the basics you’ll need to get your head around before the process begins.
Property
Who gets the family home is often one of the biggest sticking points in any type of divorce. You’ll need to either decide between you who gets to stay and who goes, or leave it to the court to decide – but if there are other, more complex assets to divide up, such as business shares, it may simplify the process for the main share-holder to concede the house.
In families with children, the main care-giver will often be favoured by the courts, should it not be possible to come to an amicable agreement. Then there are any other properties you own to consider – for example, holiday homes, investment houses and apartments around the world.
Business shares
If your, and your spouse’s, fortune came about through running a successful business, then calculating each individual’s interest in it will likely be one of the biggest tasks in coming to a divorce settlement, and is often also the most time-consuming.
In an amicable split, both spouses may wish to continue working together in spite of going their separate ways romantically – but more acrimonious divorces will usually result in one party remaining a share-holder and buying out their former husband or wife’s shares.
Pensions
Pensions, too, are a topic that will no doubt arise. A spouse going through a divorce is entitled to a share of yours, even if this isn’t automatically covered as part of the settlement, and in the U.S.A, they may need to apply for a qualified domestic relations order (QDRO) in order to make a claim. This judgement – or decree – requires a retirement plan to pay child support, alimony or marital property rights to your spouse, and potentially to any dependents, too.
If your spouse is applying for a proportion of your retirement fund, then the court must first sign a divorce order detailing the number of payments to be made to them and the number of benefits that will be paid before a pension can be transferred. It must also include the name of the pension plan that your spouse has created, and their name. Pension division on divorce will be decided in front of the court, and you will then be required to send a copy of the divorce order to your spouse’s employer. If the pension is held with your employer, you must contact your company and ask for a copy of the retirement plan.
In England, Wales and Northern Ireland, meanwhile, the value of all workplace and private pensions is included in divorce settlements, whether they were built up before or during a marriage or civil partnership.
Non-disclosure
In the event of non-disclosure, things can begin to get complicated. This is where one or both parties involved in a divorce refuse to disclose their financial position in full and is an attempt to gain a financial advantage. This most commonly occurs in cases where an individual has a complex web of investments and assets that are difficult to unpick, and while it is against the law to attempt to hide any assets during a divorce, it isn’t always possible to get a clear picture of what they have.
During proceedings, if a person hasn’t given full disclosure then the courts may draw ‘adverse inferences’ about them – that is to say, assume they are being evasive and make robust assumptions on their level of wealth as a result.
If you’ve already been through a divorce and suspect that your former spouse hid assets, then you may wish to talk to a divorce lawyer to see if you can have the case reopened and get what you are owed.
