Getting Spousal Support in a High-Net-Worth Divorce
When many assets are involved in a California divorce, there is a higher chance of litigation and fighting over how they are divided.
In other words, when a spouse has a high net worth, they will often have some unique challenges in the dissolution of the marriage process, including spousal support (alimony).
When alimony is awarded in a divorce, the California family law courts recognize the difference between temporary support, paid during the divorce process, and permanent support, which begins when the divorce is finalized.
Temporary support is usually calculated with a basic formula with some adjustments, which is half (50%) of the high earner's income, less 40% of the other spouse's income.
Suppose the higher income earner makes $10K per month and the low earner spouse makes $4k per month. In that case, the temporary spousal support will be calculated at about $3k per month.
When the family court judge determines long-term (permanent) alimony, they will consider several common factors and any other factors they decide are “just and equitable.”
Of note is that California is a “no-fault” divorce state, meaning adultery, infidelity, being a rude, selfish “jerk,” small-minded lousy parent, and other related issues are not a factor in determining an alimony award. The primary factors considered in determining spousal support include:
- Length of the marriage;
- Marital standard of living (last three years);
- Need and ability to pay.
A judge looks at the living standards of both spouses and will decide on temporary and permanent spousal support. Alimony payments normally continue until the spouse receiving payments can be self-sufficient or gets remarried. It might be possible to get long-term alimony.
Alimony typically runs for one-half the length of the marriage of fewer than ten years. Of note is that as long as alimony is being paid, either spouse can seek a modification in a family law court. Our Los Angeles divorce lawyers will review this topic in more detail below.
How Can a High-Net-Worth Impact Alimony?
High net worth can directly impact spousal support orders in a California divorce, but some legal steps must be followed before any guideline deviations.
Let's start with the most common question: What is considered high-net-worth in a California divorce? The general answer is assets valued at $1 million or more.
As noted, alimony is a monthly financial payment one spouse makes to the other, but the court has to decide that one spouse needs the support and the other can pay it.
For anyone getting divorced with more assets than average, it makes sense that spousal support payments can be high. Still, the amount of property the supported spouse receives in the divorce can reduce or even eliminate the amount of alimony paid.
Of note is the family court concept that if a spouse is financially capable of supporting themselves, they don't need any support. Still, a spouse with a high income is more likely to be ordered to pay alimony.
High-net-worth people don't usually benefit from a W-2 to quickly determine an income amount for alimony.
Instead, accountants and business professionals might be required to determine an accurate income for executives, business owners, professional practice owners, and anyone who receives their income from various sources.
Many divorcing couples will negotiate an out-of-court agreement on spousal support to avoid complications and arguments. However, you should still retain an experienced family law lawyer to protect your interests.
What About Permanent Alimony and High-Net-Worth?
California family law courts use many different factors and other relevant information to determine permanent or long-term alimony orders, including the following:
- Income of both spouses;
- Standard of living during the marriage;
- Level of contributions of each spouse to the marriage;
- Age and health of both spouses;
- Whether a spouse gave up a career to raise children;
- Job skills and employment opportunities for receiving spouse.
Permanent support is entered as part of a final divorce decree.
Despite the name, permanent spousal support is not always a permanent order because it can end if the receiving spouse gets remarried, cohabitates with someone, or becomes employed and able to support themselves.
As noted, permanent spousal support can generally be modified and will run for half the length of any marriage of fewer than ten years.
Just like temporary spousal support, net worth can directly affect the amount of any permanent support order. So, it would be a good idea to hire an experienced lawyer who will know how to use a team of experts in income determination.
As noted, one of the best ways to protect a high-net-worth person's assets and legal rights is with a prenuptial or postnuptial agreement, which can waive spousal support payments.
Still, any agreement that waives any support in a divorce will be scrutinized by the family law court divorce proceedings. In other words, this type of arrangement must be considered reasonable and conscionable. There are advantages and disadvantages to paying and receiving lump sum spousal support.
Contact a California High-Net-Worth Spousal Support Lawyer
Retaining the right lawyer for help with your high-asset divorce will increase your chances of a favorable outcome. Dating someone after divorce will not generally have any impact on spousal support payments.
At Furman & Zavatsky, our Los Angeles family law attorneys know to protect your assets during the divorce proceedings legally. So if you'd like to discuss the details of your high-net-worth divorce alimony in California, you can contact our law firm.
We can answer your questions and help you prepare for an upcoming spousal support order or modification hearing or guide you through the details of a prenuptial agreement with your future spouse.
We offer a confidential and discreet consultation with a skilled attorney to get information on how California's spousal support laws apply to you. It might be possible to terminate spousal support payments. If there has been a change in circumstances, it may be possible to modify a spousal support order.
You can contact our California certified family law specialists online for a free case evaluation with the contact form or give us a call.