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Anticipating high net worth divorce: choosing your matrimonial regime wisely
Alternative dispute resolution processes
High net worth divorce in France: which divorce to choose?
Additional financial consequences in high net worth divorce cases
PacisLexis Family Law
High asset divorce Lawyer
Divorcing is financial and time consuming and is also emotionally difficult.
In France, high net worth divorces are more complex due to the nature and size of the assets but also depending on the matrimonial property regime chosen in the first place.
Moreover, in a high net worth divorce, spouses have become used to a high standard of living too and their needs and expectations are thus different to a standard divorce.
As the expectations are higher, disputes can also be more important.
High net worth divorces can also involve international assets with valuing companies and trust arrangements and private properties and assets abroad.
If you’re in that case, you need to surround yourself with a team of specialists who understand and manage complex and diverse assets up to millions of euros and to ensure that your outcome meets your expectations, and you get what you entitle to.
However, whether or not we deal with high assets or no asset at all, our experience shows that family issues are quite the same.
high asset divorce lawyer
Anticipating high net worth divorce: choosing your matrimonial regime wisely
In France, which criteria shall I take into account when choosing a matrimonial regime?
You must ask yourself 2 questions:
- Do I want to share my assets with my partner?
- I owe a business, how to protect my partner?
What kind of marital property regime with high assets in France?
If you want to share your assets and incomes with your partner, you may choose the following matrimonial regime:
- Le regime de la communauté légale
All assets, liabilities and incomes acquired during the marriage are considered joint and half belongs to the other spouse. Only lifetime gifts and inheritance assets are considered separate.
- Le régime de la communauté universelle :
To choose this regime, spouses must get a marital agreement contract. In this regime, assets and properties acquired before and during the marriage are considered joint.
- Le régime de la communauté réduite aux acquêts :
This regime is also known as the default regime. Assets, liabilities and properties acquired before the marriage are considered separate. All assets, liabilities and properties acquired during the marriage are considered joint.
With a divorce, the ‘richest’ spouse will have to pay a “share debt maintenance”. It’s a subtraction between both spouses final assets and both spouses initial assets.
In case of a divorce or death, a spouse will get the benefits of getting half of the assets from the other if an increase in earnings and assets.
What kind of marital property regime if you don’t want to share your assets with your other half?
If you don’t want to share your assets with your partner you must opt for la separation de biens.
“Séparation de biens” is a legal term in France that refers to a marital property regime where spouses maintain separate ownership of their assets and liabilities.
In this arrangement, each spouse owns and manages their own property independently, and there is typically no community property.
This means that assets and debts acquired during the marriage are generally considered the exclusive property and responsibility of the spouse who acquired them.
As such this property regime can also become more flexible by creating joint ownership deeds and agreements or with a prenuptial agreement. For example, in case of a divorce, a joint ownership estate will be owned by both spouses so any dispute cannot be raised.
Only joint ownership assets and properties will be owned by both spouses. Other assets will be owned by spouses separately.
To learn more about prenuptial agreement, please follow the article below:
I’m not sure about the regime to choose, what shall I do?
We strongly advice you to get an appointment with a lawyer or a Notaire.
A lawyer’s advice will be interesting as a lawyer’s goal is to protect your interests and yours only.
Our team of specialists use to manage complex and diverse assets up to millions of euros. We can get you an appointment within 48 hours to help you manage legals concerns and assets.
What to do if the chosen regime doesn’t fit a partner with high assets’ circumstances?
You can change your marital regime. However you must both agree on the change.
How to choose a different marital regime?
When choosing a different marital regime, a Notaire must draft the agreement.
Conditions to make the change:
- Both partners agreement
- The new property regime must be in the family interests and children
- If applicable the previous property regime dissolution. No dissolution is needed when changing from ‘la communauté légale’ to ‘la communauté universelle’. However a dissolution of your property regime is necessary when choosing ‘la separation de biens’ from ‘la communauté aux acquets’.
When the change occurs, the Notaire will inform the civil registration clerk to legally change your marriage certificate.
high asset divorce lawyer
Alternative dispute resolution processes
Alternative dispute resolution
There are 2 other options to consider:
- Mediation
To learn more about mediation please follow the link below:
https://www.pacislexisfamilylaw.com/en/avocat-divorce/family-divorce-lawyer/divorce-mediator-lawyer/
- La separation de corps:
In France, ‘la separation de corps’ is a legal term standing for legal separation in English.
It refers to a legal arrangement where a married couple lives separately while remaining legally married. This is why it’s an alternative to divorce.
What is mediation?
Mediation is a way to mend relationships when there are disagreements or when spouses don’t listen to each other anymore.
Mediation is held by a mediator who is impartial.
Mediation is a way to resolve disagreement as it’s confidential and helps improving communication as finding a solution to come to an agreement.
Mediation is legally binding as per articles 21 à 21-5 de la loi n°95- 125 du 8 février 1995 regarding French civil law.
What if mediation fails?
When mediation fails and spouses cannot come to an agreement regarding how they will share assets and properties, they can petition the court.
Mediation is a confidential process so what has been said and done during the mediation cannot be used before a judge.
What is the difference between ‘la separation de fait’ and ‘la séparation de corps’ in France?
In France, ‘la separation de fait’ refers to a non-legally binding separation. This can be used as a ground for a fault divorce in France or as a ground for irretrievable breakdown of marriage.
‘La separation de corps’ is legally binding.
high asset divorce lawyer
Alternative dispute resolution processes:… Next
‘la séparation de corps’ process
3 options to get a legally binding separation:
- A deed: each spouse must get their lawyer. After a negotiation process, lawyers draft a deed.
Spouses then will have 15 days to agree and sign the deed.
- A court deed: each spouse must have their own lawyer. Each lawyer will draft a deed. Again spouses will have 15 days to agree and sign the deed. Then the court will approve it.
- Court’s petition: one spouse and their lawyer petition the court. Proceedings are the same than a divorce.
Advantages to opt for ‘la separation de corps’
‘la separation de corps’ can be interesting with high assets and incomes :
- It’s a long-term separation. This can be the first stage of a divorce. It allows spouses to think about what they want.
- ‘la separation de corps’ allows spouses to enter ‘la separation de biens’ property regime where all assets, properties and liabilities acquire during ‘la separation de corps’ are separated and cannot be taken into account with a divorce.
- All assets, properties and liabilities acquire during the marriage will be shared and the spouse with less assets will be financially protected.
Can I divorce with a ‘separation de corps’ agreement?
Yes!
‘La separation de corps’ doesn’t dissolve the marriage. It’s like an on-hold situation and spouses can finally choose to divorce.
high asset divorce lawyer
High net worth divorce in France: which divorce to choose?
With high assets, is a mutual consent divorce recommended?
Yes!
Expect with abuse, a mutual consent divorce is recommended.
It is a specific type of divorce process that allows a married couple to end their marriage amicably without going through a lengthy and contentious legal battle.
The spouses, often with the assistance of their respective lawyers, draft a “convention de divorce” or divorce agreement. This document outlines the terms of the divorce, including how property, assets, and liabilities will be divided, child custody arrangements, and any other relevant issues.
This type of divorce is most of the time less expensive, faster and protect the family best interests.
To learn more about mutual consent or uncontested divorce in France, please read the article below:
Is a mutual consent divorce through Court possible in France with high assets?
Yes!
This type of divorce is recommended when a child is requesting a hearing or with assets abroad.
If a child or a minor child requests a hearing, the divorce order will be served by the court.
The difference between a mutual consent divorce by lawyers and a mutual consend divorce through court is that the court must agree on the application. If the court doesn’t agree on the application, they can request to amend the application or to remove some part of the application clauses.
Is a fault divorce possible with high assets?
It depends on the grounds and who is responsible.
A fault divorce is a contentious divorce. This type of divorce can be recommended for a spouse with high assets and who is not responsible for the grounds.
If so, the following is applicable:
- A spouse with high assets can avoid paying spousal maintenance. Please note that adultery can’t be served as a ground.
- A spouse with high assets can claim damages for serious ground. However, most of the time, damages are very low.
This is important to understand if spouses come back together and finally decide to divorce further down the line, the fault-based ground will be removed and the spouse with high assets can’t avoid paying spousal maintenance and cannot claim damages.
The other way round is also true and a spouse with no assets could claim damages if a divorce for serious ground is granted to the spouse with high assets.
To avoid a no-fault divorce, a spouse with high assets can:
- Get a mutual consent divorce if the spouse with no asset agrees.
- Petition the spouse with no assets for acceptance of the divorce which will avoid the spouse with no assets to amend the divorce application and opt for a fault-divorce.
If a spouse with no assets has already served the divorce application, the spouse with high assets can:
- Get them to agree on a mutual consent divorce
- Get them to amend the divorce application and opt for the acceptance of the divorce.
Irretrievable breakdown with high assets
This type of divorce in France can be recommended to a spouse with high assets if no divorce application has been served to the one with no or less assets.
If the divorce application has been served by the spouse with no or less assets, the spouse with high assets could:
- Opt for a mutual consent divorce anytime during the proceedings
- Opt for a fault-based divorce
Challenges in high net worth divorce cases
With significant wealth, it may be tempting for a spouse to try to hide or transfer assets. There are many ways in which assets can be hidden. If the other spouse suspects the other of avoiding full disclosure, they can apply to the court to check the bank accounts database called FICOBA. This French database can hold all the bank accounts of a spouse.
The spouse with less assets can also apply to the court to get some paperwork and documents related to their assets.
high asset divorce lawyer
Additional financial consequences in high net worth divorce cases
Tax implications
Divorce can have significant tax consequences. The division of assets, spousal maintenance payments can trigger tax liabilities.
If a divorce order is served during or at the end of a the year, the French system will take the divorce into account by the 1st January. As a result each spouse will have to file their tax return separately for the whole year.
Impact of a divorce on life insurances?
Divorce can impact the cash value of a while life insurance policy if it’s considered a marital asset and will be subject to division during the divorce process depending on your property regime.
To avoid a life insurance policy to be divided during a divorce process, the spouse paying in will have to tell the insurer where the amount comes from each time they make a deposit.
With a ‘separation de biens’ property regime, the divorce cannot impact the life insurance policy if it’s not joint ownership.
Can a divorce end a life insurance policy?
No!
However, spouses must be aware of the beneficiary’s clause. If the other spouse is the beneficiary, you may want to a add a clause, update the beneficiary and review you coverage needs.
Adding a clause can include that the beneficiary is the other spouse if there is no divorce or separation upon the death of the policy owner.
Can the richest spouse be entitled to pay for spousal maintenance before being legally divorced?
Probably!
In France, you can be entitled to pay spousal maintenance for ‘le droit de secours’ as spousal maintenance in English and is paid by the richest spouse to the other when they are separated but still married so it means it’s a spousal maintenance before the divorce’s final order.
‘La prestation compensatoire’ also spousal maintenance in English is monthly payments made by the richest spouse to the other after the divorce. This type of spousal maintenance is fixed by the French family law courts.
This type of spousal maintenance can be a lump sum but also the payment of the loan on a family home.
Can the richest spouse be entitled to pay for spousal maintenance after being legally divorced?
Not necessary!
A spouse can claim spousal maintenance depending on circumstances and the agreement legally binding the parties but also depending on the divorce order. With a fault-based divorce order, the richest spouse won’t be entitled to pay spousal maintenance.
Can the richest spouse be entitled to pay for children maintenance?
Not necessary!
Paying for child(ren) maintenance is related to where they live.
If the children live with the richest spouse, they will not be entitled to pay for children maintenance as they will pay for their expenses.
If the children live with the less rich spouse, they will be entitled to pay for children maintenance.
With a joint custody agreement, the richest spouse may be entitled to pay children maintenance because of the lack of incomes of the other spouse.
What are the stages after a divorce?
After a divorce in France, the next stage is the marital property regime dissolution.
It’s a settlement of all assets acquire by the spouses.
The next step is the share.
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and to care
PacisLexis Family Law
You want to learn more about high net worth divorce?
PacisLexis Family law can guide you through the process of getting a divorce in a friendly and amicable manner, helping you and your partner too with understanding and respect.
PacisLexis Family Law divorce lawyers team can assist you in navigating the legal complexities of dividing life insurance policies and marital assets during a high net worth divorce process.
PacisLexis Family Law
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In today’s globalized world, the boundaries of love and partnership extend far beyond national borders, leading to a growing phenomenon of international marriage. For French citizens, the prospect of marrying someone from another country brings both excitement and challenges, as they embark on a journey that transcends cultural, legal, and logistical boundaries.
Calculating child maintenance payments
Child maintenance calculations can vary between countries, and both France and the UK have their own systems for determining child maintenance payments.
United Kingdom (UK):
In the UK, child maintenance payments are typically determined by the Child Maintenance Service (CMS), which is a government agency. The CMS uses a formula to calculate the amount of child maintenance that the non-residential parent (the parent who doesn’t have the main day-to-day care of the child) should pay. The formula considers factors such as the non-residential parent’s gross income, the number of children involved, and the number of nights the children spend with the non-residential parent.
Spousal maintenance
Only spouses so married couples may be entitled to a maintenance claim or to pay for spousal maintenance and your lawyer’s firm can help you calculate the award.
Spousal maintenance definition:
Spousal maintenance is a payment paid by a spouse to the other spouse if a spouse doesn’t have enough income after you’re separated from the other.
When a spouse has much higher income than the other, there may need to be a period of ongoing financial support in order not to affect the well-being of the other.
The paying spouse is the debtor and the one receiving the allowance is the recipient.