High Net Worth (HNW) and Ultra-high Net Worth (UHNW) individuals have many complex challenges during a divorce, of which one of the most significant is Real estate. Some of the complexity centres around:
- How commercial and residential assets are divided between the parties globally
- New home(s) required for one or both of the parties
- How these real estate assets are financed
- Taxation considerations and implications
In many cases, even with HNW and UHNW families, there will be debt secured against real estate to leverage the assets and provide the highest return on investment. When assets are split between parties and the ownership changes this will normally trigger a requirement to refinance, which can prove a difficult process to navigate.
If refinancing is not arranged, then the court may be left with having to order the sale of the asset. A forced asset sale could financially adversely impact the parties if it is not a good time to sell the asset and there is time pressure from the court to sell it quickly.
Furthermore, If there is a requirement to purchase one or more new residential homes financing these new homes can have added complexity if one of the spouses does not have a regular income.
In such situations, family mediation is a great way to discuss matters such as alternative financing options, to try and reach an amicable resolution if possible to stay out of court and save on legal fees.
These financing requirements are challenges that can be overcome with an experienced debt advisor such as the team at Arc & Co.
Arc & Co. is an independent full-service real estate debt advisory business with offices in London, Singapore, Monaco and Switzerland.
We can assist people going through a complex divorce settlement to restructure the debt on current and new real estate assets to ensure that your full portfolio is financed optimally.