High-net-worth divorces in California often involve significant financial complexities, particularly when it comes to spousal support (alimony). When one spouse has substantial wealth, determining a fair and appropriate support amount requires a thorough analysis of income, assets, and lifestyle considerations.
At Fernandez Law Group, our Los Angeles family law attorneys help high-net-worth individuals navigate spousal support disputes while protecting their financial interests.
How is Spousal Support Determined in High-Net-Worth Divorces?
California law allows courts to award temporary and long-term spousal support based on several key factors outlined in California Family Code Section 4320. While high-net-worth divorces follow the same general guidelines, the financial stakes are much higher, and courts take additional considerations into account.
Key factors courts consider in high-net-worth spousal support cases in California include:
- Income and Earning Capacity of Each Spouse
One of the most critical factors in determining spousal support is both spouses’ income and earning capacity.
In high-net-worth cases, courts examine:
- Business ownership and profits.
- Investment income, including stocks, dividends, real estate, and offshore accounts.
- Trust funds or inheritances.
- Intellectual property or royalties.
- Bonuses and deferred compensation packages.
Courts may also consider imputed income if a spouse is voluntarily unemployed or underemployed.
- Standard of Living Established During the Marriage
Spousal support in high-net-worth divorces aims to help the lower-earning spouse maintain a lifestyle similar to what they enjoyed during the marriage.
This may include:
- Luxury homes and vehicles.
- Private school tuition for children.
- Exclusive club memberships.
- Travel and vacation expenses.
- Personal staff, such as chefs and assistants.
The goal is to prevent the lower-earning spouse from experiencing a drastic financial decline post-divorce.
- Length of the Marriage
The duration of the marriage significantly impacts spousal support. Courts may award support indefinitely in long-term marriages (typically those lasting 10 years or more). For shorter marriages, support is usually granted for a timeframe not exceeding half the length of the marriage.
- Contributions to the Marriage
Courts assess how each spouse contributed to the marriage, including:
- Supporting the higher-earning spouse’s career or business.
- Sacrificing personal career advancement to raise children.
- Managing household affairs while the other spouse builds wealth.
A spouse who made significant non-financial contributions may receive higher support payments.
- Tax Consequences
High-net-worth divorces often involve complex tax considerations. Spousal support payments are no longer tax-deductible for the paying spouse or taxable to the recipient (for divorces finalized after 2018 under the Tax Cuts and Jobs Act). Proper payment structuring can help minimize tax burdens for both parties.
- Prenuptial and Postnuptial Agreements
Many high-net-worth couples have prenuptial or postnuptial agreements that outline spousal support terms. Courts generally uphold these agreements if they are executed fairly and without coercion.
- Marital Misconduct and Domestic Violence
While California is a no-fault divorce state, courts may consider a spouse’s history of domestic violence when awarding spousal support. A documented pattern of abuse can influence the support amount or duration.
Protecting Your Financial Interests in a High-Net-Worth Divorce
Spousal support in high-net-worth divorces requires skilled legal representation to ensure fairness and financial security. At Fernandez Law Group, our Los Angeles County family law attorneys have extensive experience handling complex financial matters in divorce cases. If you are facing a spousal support dispute, contact us at (310)-564-9163 or online for a confidential consultation to protect your assets and future.