Reviewed by John E. Clancy, ESQ.
Key Takeaways
- A divorce is generally called high net worth when the couple’s assets exceed about one million dollars, often involving businesses, real estate, and complex investments.
- Both spouses must disclose their finances through a sworn Case Information Statement under Court Rule 5:5-2.
- That statement is a confidential court document; it is not routinely shared with the IRS.
- Forensic accountants and appraisers are often used to value complex assets and uncover hidden ones.
A divorce is generally considered high-net-worth when the couple’s assets exceed one million dollars, involve complex investments, businesses, real estate, or considerable retirement accounts. In New Jersey, both spouses are fully required to disclose their finances through a sworn Case Information Statement filed with the family court in accordance with Court Rule 5:5-2. This statement is confidential and exchanged between the parties, though it is not routinely sent to the IRS. If you are looking to get divorced and are unsure whether you or your spouse qualifies for a high net worth divorce, it is in your best interest to read on and give our firm a call today to speak with our Morris County NJ divorce lawyers. Our legal team is here to help.
What is required to qualify for a high net worth divorce in New Jersey?
Keep in mind that couples that qualify for a high net worth divorce include those who have assets that are worth one million dollars or more. If the couple decides to divorce, it is understood as a high net worth divorce. These instances are related to other divorce proceedings because they are similar to settlements on marital assets. The issues that may be involved include child custody, child support, spousal support, and the division of assets. It is important to recognize that in cases of a high net worth divorce, processes can become more difficult because they concern additional assets such as:
- Tax structures and planning
- Business ownership, including partnerships, and limited liability companies/corporations
- Intricate retirement and deferred income structures
- Real estate holdings
- Widespread investments
If you are going through a high-net-worth divorce, you will need an experienced Mendham, NJ high net worth divorce attorney on your side. Give our firm a call today to begin the process.
How can I show proof of finances?
If you are going through a contested high net worth divorce, both spouses are instructed to provide proof of their finances either through tax returns or net worth statements. This shows the court with in-depth knowledge of the finances within the marriage. With this information, the court can determine what each spouse is worth and how they can accurately divide assets between the two of them.
In New Jersey, full disclosure is made through the Case Information Statement, a sworn financial affidavit of income, expenses, assets, and liabilities that Court Rule 5:5-2 requires in any contested divorce involving support, alimony, or equitable distribution. Typically, this document is required within 20 days after the answer, and each party must certify that the contents of the document are true and accurate.
It’s important to understand that the financial information detailed in these documents is generally not shared with the Internal Revenue Service. The Case Information Statement (CIS) is a confidential court document and has protections under both Court Rule 1:38-3 and 5:5-2, which may create tax or legal exposure is dishonesty. Because a party must swear that the statement they’ve provided is true and must attach tax returns as support, filing false financial information may lead to penalties in the divorce and potential liability in other facets, which is why full transparency is critical.
Uncovering complex or hidden assets
Because high-net-worth cases typically involve complex assets that are difficult to value or easy to hide, both parties often utilize specialists like forensic accountants, business valuators, and appraisers. This can help trace marital property, identify hidden assets, and determine the value of assets.
How can I ensure my finances are protected throughout the divorce process?
If you have worries about how you can protect your finances in the event of a divorce, keep in mind that you have options. First, you can draft and sign a prenuptial agreement before the marriage is official. This is a document that allows couples to choose what happens to their assets if the marriage does not work out. Spouses are also able to get a postnuptial agreement to achieve the same goals, but you will need to recognize that this document must be signed once the marriage is official.
CONTACT OUR FIRM
It’s important to understand that, in New Jersey, working with an attorney is imperative. It’s in your best interest to obtain legal guidance to help you through this process, as our firm can represent your best interests. If you need an experienced legal team to guide you through your divorce, contact Townsend, Tomaio, Newmark & Clancy L.L.C today.
