Just because you are in the high-income tax bracket doesn’t mean you are a high-income earner. In many high-asset cases, one partner is typically considered the breadwinner while the other has a lower paying job or no job at all – usually because they have decided to stay home and take care of the children. As you can imagine, this distinction is incredibly important when divorce rears its ugly head.
High-asset and complex divorces can be incredibly expensive processes because of the unique mixture of wealth and other assets that need to be divided. If a partner can’t afford an attorney to look out for their best interests – or financial experts to properly value property and uncover hidden assets – then they may feel forced to accept a settlement offer that is significantly less than what they are owed.
So what is someone in this type of situation to do? The answer may lie in divorce funding.
What is divorce funding?
As a July Forbes article explains, divorce funding is a relatively new type of business in which a company will provide “advances to cover certain expenses associated with divorce proceedings.” The money fronted by the company can be used for the cost of hiring experts, legal fees and other reasonable personal expenses. Repayment is then made to the company when and only when a settlement has been reached.
When is divorce funding necessary?
As we explained above, spouses with little resources or those who are not employed at the time divorce proceedings start often can’t afford an attorney’s retainer or pay for forensic accountants, valuation experts, advisors and other legal professionals who may be needed to resolve a high-asset divorce appropriately.
High-asset and complex asset divorces can be incredibly challenging legal situations that most people are not equipped to handle on their own. Legal representation is often a must, but this can be difficult if you don’t have the funds needed to hire legal counsel and protect your rights. Divorce funding, as the Forbes article explains, gives spouses in these situations the opportunity to “level the playing field” and ensure they are getting a fair deal in their divorce.