The definition varies – according to Forbes, high net worth individuals have at least $2 million in liquid assets and properties. According to the SEC, a high net worth individual has a net worth of at least $1 million and/or a joint income with his or her spouse exceeding $200,000. While these definitions differ, if your net worth meets seven figures or your income is in the six-figure range, you are considered an individual with a high net worth.
High net worth divorce
A high net worth divorce is, as the term suggests, the legal termination of a marriage between two individuals who collectively meet a monetary standard. The complexity and process of a high net worth divorce can vary greatly, from an amicable, no-fault divorce to an arduous, drawn out legal battle. With so much money at stake, the latter is much more common. As such, many individuals with great disparities between their own net worth and that of their partner choose to sign prenuptial agreements prior to marriage in order to protect their assets from being divided in the event of separation. Prenuptial agreements are not romantic, but they are a pragmatic, necessary measure. High net worth divorces are often more complex than typical divorces, with attorneys dividing inheritances, estates, trust funds, global properties and so forth.
Approximately 50% of marriages end in divorce regardless of net worth. In the United States, an estimated 2,400 divorces take place every day. Like the rest of the population, high net worth individuals are just as susceptible to divorce as everyone else. Despite efforts to save a marriage and the best intentions of both parties, some marriages simply come to a natural end. Whether a divorce is contentious or not depends on a multitude of factors, but when large sums of money are being disputed, a divorce can become heated.
While a prenuptial agreement might theoretically go against the principle of marriage as the joining of all things, it can be the key to avoiding a long, drawn out, upsetting and expensive court battle. Some divorces can take years to reach a settlement. Many attorneys who specialize in family law recommend consulting with a professional before entering into a marriage to draw up some sort of agreement. Of course, a prenuptial agreement does not increase the odds that a marriage will fail, but in the event that a marriage does break down, a prenup can save both parties a lot of time, money and heartache. While prenuptial agreements are not iron-clad and can certainly be disputed in a court of law, they serve to protect the interests of both parties so that a fair and reasonable settlement can be reached in the event of divorce, whether among high net worth individuals or couples with an average household income.