Getting a divorce is hard on anyone, but when there are substantial assets in the family, the stress can worsen. Managing finances becomes complicated when large amounts of money and other expensive valuables come into play. Even though there may be plenty of money to go around, it can still be difficult to make sure both parties can maintain financial stability post-divorce.
Often, alimony is an equitable solution to handling wealth during and after divorce proceedings. Reaching a fair spousal support agreement, however, requires navigating a legal landscape with no clear-cut rules or guidelines.
In this article, we explore how alimony works in the context of a high net worth divorce.
Understanding Alimony and its Role in High Net Worth Divorces
Alimony, or spousal support, is typically defined as a court-ordered payment that one spouse makes to the other after a divorce. In many divorce cases, spousal support is one of the most hotly debated decisions. This strife can be especially prevalent in high asset divorces, where the stakes are higher, and the financial implications are more significant.
Alimony is generally designed to help alleviate any financial disparities between the two parties following a divorce. Ultimately, the goal is to help both spouses maintain the standard of living they enjoyed during the marriage.
Factors that influence the amount of spousal support in Florida include:
- The length of the marriage
- The income of both spouses
- Each spouse’s earning potential
- The age and health of each spouse
- The standard of living during the marriage
The court carefully considers each spouse's financial needs and earning capacity before making its ruling. There is no definitive formula for calculating spousal support in Florida, but understanding the factors that influence it can help you assess your situation and make informed decisions.
The Forms of Spousal Support Available in Florida
This type of alimony is designed to help a spouse financially transition from married life to single life. It is meant to provide temporary assistance to cover basic living expenses such as rent, utilities, and food. Bridge-the-gap alimony lasts for a maximum of two years and cannot be modified in amount or duration. This spousal support option is not meant to provide long-term support.
Rehabilitative alimony provides financial assistance to a lower-earning spouse until they can become self-supporting. This support can cover expenses like job retraining, education, or other costs associated with becoming financially independent. The goal is to give the recipient spouse the tools they need to rebuild their life. This support helps free them from needing alimony altogether.
This type of alimony provides financial support with a pre-determined end date. Traditionally, Florida uses this support for shorter marriages, generally 7 years or less.
This support lasts indefinitely. It is appropriate in cases where one spouse has significantly higher income or assets than the other, which is likely the case in a high asset divorce. Permanent alimony also applies when the receiving spouse is not likely to support themselves. They may suffer from physical or mental issues, making working difficult, or they may be advanced in age. Generally, permanent alimony applies to longer marriages.
This spousal support ends only when either party dies. It can also end if the recipient remarries.
In recent years, permanent alimony has been a hotly debated topic in Florida. Some argue that the current laws are outdated and unfair. Others believe that permanent alimony is necessary for those who sacrificed career opportunities to support their spouse's career aspirations. Currently, some lawmakers are attempting to do away with permanent alimony altogether.
Reasons Why Alimony Is a Good Option for High Net Worth Divorces
Many people have negative associations with alimony, but there are several reasons why it is beneficial in these cases.
For example, if one spouse spent years staying at home to raise children, or they supported the other spouse's career, they will need help maintaining their standard of living. Additionally, alimony can help keep the peace. Knowing that everyone is cared for allows both parties to focus on rebuilding their lives.
The Challenges of Maintaining Lifestyle
Maintaining an affluent lifestyle is a delicate balance in a high asset divorce. Courts assume that both spouses should be able to continue living as they have been. This includes luxury expenses. The paying spouse can feel like they are being taken advantage of.
Moreover, the receiving spouse can also feel left out. In theory, the paying spouse could afford to keep the other within their accustomed lifestyle, and they will still have plenty of assets leftover. Even if they are living the same as they were, this fact can leave receiving spouses feeling like they are being cheated out of property.
High net worth families must approach all alimony negotiations carefully. Make sure to high an experienced attorney who can work with both parties to achieve an equitable distribution of property.
If you are an affluent family facing divorce, contact Russell S. Hershkowitz, L.L.C. today for help. You can reach us online or call our team at (407) 753-4111.