Spousal Support for High-Net-Worth Individuals

When it comes to divorce, financial complexities are magnified for high-net-worth individuals (HNWIs). One area where this is especially true is spousal support, often referred to as alimony or maintenance. For those with substantial assets and income, navigating spousal support requires nuanced understanding of family law and the unique factors that come into play in these cases.

At Conniff & Keleher, we specialize in providing high-net-worth clients in the Chicagoland area  with the legal expertise they need to secure fair and equitable outcomes in their spousal support agreements. Here are key considerations if you’re facing spousal support proceedings in a high-net-worth divorce:

1. Income and Lifestyle Assessment

In most divorce cases, spousal support is often determined based on the recipient’s needs and the payer’s ability to pay. However, for high-net-worth individuals, this calculation involves a much more complex analysis of both parties’ financial circumstances. The court will look closely at the income, both earned income (such as from employment) and passive (from investments, businesses, real estate, etc.).  The court will also consider the standard of living established during the marriage.

HNWIs typically enjoy a much higher standard of living, meaning that spousal support calculations must ensure the receiving spouse can maintain a lifestyle that approximates what they were accustomed to during the marriage. This may result in significantly higher spousal support awards.

2. Valuation of Assets

Accurately valuing assets is critical in determining spousal support. This includes evaluating a diverse portfolio of assets that may include:

• Multiple properties
• Business interests
• Stock options and other investments
• Retirement accounts

Complex financial instruments such as trusts or international assets must also be carefully reviewed. Failing to account for the true value of these assets can significantly skew spousal support negotiations or court decisions.

3. Duration of Support

Another key factor in high-net-worth divorces is the duration or spousal support or the length of time of the spousal support obligation. While some divorces result in temporary alimony, long-term marriages—especially where one spouse was dependent on the other for financial support—may result in longer-term or even permanent support awards.

In HNWI cases, where one spouse may have contributed to a successful business or maintained the household while the other spouse grew wealth, courts may lean towards more prolonged financial support. The goal is to ensure the receiving spouse is not unduly disadvantaged financially.

4. Tax Implications

Tax treatment of spousal support has changed significantly since the 2017 Tax Cuts and Jobs Act. Before this legislation, alimony or spousal maintenance payments were tax-deductible for the payer and taxable income for the recipient. Now, alimony is neither deductible by the payer nor considered taxable income for the recipient.

For high-net-worth individuals, these changes have altered the dynamics of spousal support negotiations, because the tax benefits previously associated with paying alimony no longer exist. At Conniff & Keleher, serving Oak Park and the surrounding Chicagoland area,  we help our clients strategize to minimize tax burdens and ensure that spousal support agreements are crafted with these factors in mind.

5. Prenuptial and Postnuptial Agreements

Many high-net-worth individuals safeguard their income and their assets with prenuptial or postnuptial agreements. These agreements can preemptively address spousal support or alimony, often specifying, in the event of a divorce, how much spousal support will be provided or whether it will be provided at all.

However, prenuptial agreements are not ironclad, and courts can sometimes invalidate or adjust them if deemed unfair or signed under duress. Having experienced family law attorneys on your side ensures that your prenuptial or postnuptial agreement is enforceable and protects your interests.

6. Maintaining Privacy

In high-net-worth divorces, the stakes are high not only in terms of financial outcomes but also in terms of preserving privacy. Public spousal support disputes can attract media attention and expose intimate financial and personal details. At Conniff & Keleher, we understand the importance of privacy and discretion and are skilled at resolving sensitive matters through private negotiation or mediation whenever possible, keeping our clients’ personal affairs out of the spotlight.

Learn More About Spousal Support From our Divorce Lawyers at Conniff & Keleher

Spousal support for high-net-worth individuals presents unique challenges that require careful planning and expert legal guidance. Our Family Law firms in Chicago and Oak Park are committed to helping our clients navigate the complexities of spousal support with a tailored approach that ensures a fair and sustainable outcome.

If you’re a high-net-worth individual going through a divorce, contact Conniff & Keleher today to schedule a consultation. Our divorce attorneys are here to provide the personalized support and strategic advice you need to protect your financial future.