What is the Definition of a “High Net Worth” Divorce in North Carolina?

In a world of rampant inflation and economic volatility, it can be difficult to define terms like “high-net-worth.” If you are not sure whether you fall into this category, it might be worth reviewing the “official definition” of high-net-worth. This may be particularly helpful if you are heading toward divorce in North Carolina, as the end of a marriage can pose serious threats to your overall wealth. Fortunately, both middle-income and high-net-worth spouses can employ various strategies to preserve and protect their financial well-being during divorce.

According to most metrics, a high-net-worth individual is someone who has liquid assets worth at least $1 million. Most American families have most of their wealth invested in real estate, and this is a prime example of a “non-liquid” asset. Because a real estate transaction can take months or even years to finalize, family homes are not as liquid as cash, stocks, bonds, mutual funds, EFTs, and so on.

In other words, high-net-worth individuals meet the $1 million threshold without even counting their real estate holdings. This means that they have at least six figures invested in the stock market, in treasury bills, and held in bank accounts. Although $1 million might seem like a relatively low sum in the modern era, most people can only reach this level of wealth through homeownership over many years. This makes “true” high-net-worth individuals quite rare in the United States.

With all that being said, North Carolina residents may have their own unique thresholds and definitions to consider when it comes to high net worth. Each state is a self-contained economic environment with its own cost of living, real estate market, and job opportunities.

In North Carolina, you can reach the top 10 percent of earners with a relatively low annual income. According to the Greensboro News and Record, top earners in North Carolina are considered “middle income” on a national scale – and in 2019, they noted that the top 10% earned about $90,000 per year in the Tar Heel State.

These income figures seem to vary depending on who you ask, and statistics indicate that the metrics have changed considerably since North Carolina emerged from the pandemic. Although a North Carolina resident might have been considered “high-income” by earning $90,000 per year in 2019, inflation may have raised the bar considerably since then. It is a well-known fact that the wealth divide became much greater after the pandemic, and this pattern seems to have played out in the Tar Heel State.

For example, Yahoo News reported in 2024 that the top 10% of earners in North Carolina were making at least $238,000 per year. According to a 2024 CNBC report, however, an annual income of $238,000 represents the top 5% of earners – not the top 10. CNBC also notes that you must earn approximately $555,000 each year to earn a place in the Tar Heel State’s top one percent. About 225,000 households in North Carolina have total assets worth over $1 million (both liquid and illiquid).

This all suggests a slightly lower threshold compared to the rest of the country. Even if you do not “qualify” as a high-net-worth individual on a national scale, you may nonetheless be one of the wealthiest people in North Carolina. It is important to consider these factors when determining whether to consider yourself a high-net-worth individual in the context of a divorce.

In many ways, your net worth has no real impact on your divorce – and many of the same strategies apply regardless of your wealth. On the other hand, high-net-worth individuals may need to employ targeted strategies to pursue positive outcomes during divorce. Examples of these strategies include prenuptial agreements, collaborative divorce, unique child support calculations, and much more. High-net-worth spouses in North Carolina often choose to work with divorce lawyers who have specific experience with high-net-worth divorces.

Whether you are officially “high-net-worth” or not, it makes sense to be strategic when heading toward divorce in North Carolina. Your wealth is always worth preserving, whether your portfolio is worth millions or you are living paycheck to paycheck. Fortunately, you can work alongside experienced family law attorneys to achieve your financial goals and limit the effects of divorce. At Arnold & Smith, PLLC, we have specific experience with high-net-worth and high-income spouses – allowing you to proceed with confidence. Book your consultation today to get started with a personalized divorce strategy.