Magnuson Lowell Blog
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Property division, tax consequences and spousal support are often contentious issues in any divorce. However, these issues become even more complicated when divorcing couples have highly valuable assets. Due to the unique and high-stakes nature of divorcing with complex assets, high-net-worth individuals should carefully consider and evaluate these factors.
Identifying and categorizing assets
It can be complicated to identify assets in high-net-worth divorce cases. While most assets owned before the marriage will likely be considered separate, some of them might be subject to property division due to appreciation. Additionally, many couples with complex assets may have signed prenuptial agreements that influence property rights.
Complicated divorce cases often require special evaluations, especially when businesses are involved. For example, an expert is typically needed to determine the value of a business based on annual statements, debt, accounts receivable and goodwill. Other assets, such as intellectual property, investments, stocks, unvested interests and retirement accounts, may also need evaluations.
Dividing expensive assets often results in significant tax issues. A spouse who receives certain assets may be taxed on the distribution. Many spouses do not consider the tax implications of spousal maintenance, benefit plans and business entities. Considering the outcome on taxes with the help of a lawyer is a critical aspect of high-asset divorces.
Duration of proceedings
The various complexities of these cases can sometimes cause them to take longer than typical divorce cases. Identifying and valuing assets can be cumbersome and time-consuming. Due to potential delays, there may need to be temporary orders of spousal maintenance, legal expenses and custody matters. These ramifications sometimes lead divorcing couples to consider an uncontested divorce.
Spouses of high-net-worth may be public figures who are reported on in the media. This can lead to marital issues and divorce proceedings being used by journalists and broadcasted to the public. A family law attorney can help couples implement privacy protection techniques, such as sealing court proceedings, getting gag orders or going through mediation.
This list is not completely exhaustive of all the detailed aspects involved in a complex divorce case, but they are important to highlight. Divorcing couples with high-value assets and property should consider these factors when a divorce is imminent. Even in circumstances of uncontested divorces, consulting with a family law attorney is a great way to receive guidance on the best steps to take. An attorney can also get you in touch with financial professionals to evaluate your assets.