Splitting up a marital estate can be a long and complicated process, especially if the assets include properties and businesses privately owned by the couple. It’s no wonder that high net-worth divorces are often challenging cases. To further delve into these unique cases, here are the most pressing financial and distribution issues that come with high net-worth divorces:
Finding all the Assets
When a large number of assets are involved, it is crucial to get a hold of everything owned by each spouse and jointly owned as a couple. These assets may include real estate, vehicles, bank accounts, stocks, investments, businesses, retirement plans, and even rare collections, such as art and antiques.
Lawyers recommend a full asset search on both spouses. After all, assets that have been hidden or forgotten could be essential in the final settlement.
Appraising the Value of the Assets
Asset valuation has always been complicated for divorcing couples with high net-worth income, said a divorce lawyer in Nassau County. For instance, if a spouse owned the family business before the marriage, it might be appropriate to include only the appreciation in business value over the course of the union. It means appraising the value of this particular business requires a comparison of its current value to its value at the date of marriage. But here’s when it gets tricky: adjusting the value relating to the alimony or spousal maintenance. A spouse may receive double recovery for a single asset as a form of spousal maintenance payments on top of his or her share of the value of a business.
Considering Tax Implications
With so many financial factors involved in a high net-worth divorce, it can be easy to lose sight of potential income tax ramifications once the couples signed the papers. Receiving or transferring an asset comes with corresponding tax responsibilities. Also, with the new tax law, high net-worth divorcing couples must consider the changes in the tax exemption on alimony or spousal maintenance payments before deciding on settlement or separation agreements.
Divorce is unquestionably a stressful, painful process for anyone. But for high net-worth divorces, the process can be way more taxing; thus, their need for a team of divorce lawyers, financial advisers, and accountants to guide them throughout the process.