Divorce is a complicated matter, and it brings in mental, emotional, and financial instability in your life, regardless of the value of your case’s net worth. The emotions associated with a divorce are heightened as the complexity of the case increases. The higher the net-worth of a case, the more complicated things get in a divorce. Liquid assets that total to $1 million or higher fall under high-net-worth divorce cases.
As compared to couples with well-defined or limited assets, couples with complicated and high-net-worth assets have to face more challenges. Real-estate partnerships, closely-held business interests, stock options and voting rights, and deferred compensation are the type of financials that complicate matters. The right approach in such cases is to leave the task of determining the value of the assets to the professional family lawyers. It is essential because, in such high worth cases, it becomes very difficult to identify community and separate property in community property states such as California.
Here is a list of smart ways to effectively handle high net-worth divorce cases to make things a little less messy and complicated for you!
Seek Legal Assistance Early in the Process
There are situations when the divorce is inevitable, and the more you delay seeking legal assistance, the more complicated the process may become. When it is clear that divorce is the only option, it is best that you seek the counsel of an attorney as early as possible. In a high net-worth divorce case, it takes time to gather all the assets and understand the nature of every asset. With an attorney’s assistance, you will know how to gather information regarding all your assets, including your bank accounts. It is important that you know if your assets and debts are community or separate property because it can become extremely complicated.
List all Known Assets and Expenses
Another important thing you need to do is to account for the financials of your marriage. Quantifying all the personal expenses is essential because the court determines the lifestyle of a family based on these expenses. Even the division of the assets depends upon all expenses. When dealing with large complicated assets, there is a chance that you may forget about an asset or debt. Make sure to accurately list all of your assets in the schedule of assets and debts because omitting an asset may result in a division which is not 50% each as a penalty. This could be similar to In re Marriage of Rossi (2001) where a wife won the California lottery of over $1 million dollars and did not list this asset on her schedule even though they were married on the date she won. When the husband found out, he went to court and the Judge awarded [as a sanction] 100% of the lottery winnings rather than 50%!
Gather all the Necessary Documents
The essential documents in a high net-worth divorce cases include the pre-nuptial agreements (if there is one), real estate documents, trusts, and deeds. To make your financial situation clearer, you need present these documents to your attorney. These documents will help reduce the financial mess and help the case to proceed without unneeded stress.
Understand Taxation and its Consequences
Minimizing the tax consequences during a high asset divorce is extremely important. Family law attorneys, except those with an LLM in Taxation, cannot give tax advice. When business valuations and other assets values are at question, an expert opinion from professionals, such as Certified Public Accountants [CPA] or business valuators, may be needed. Your family law attorney can assist with working with these professionals.
Try to Plan a Reasonable Settlement
The financial situation is already very stressful in a high net-worth divorce case, and a wrong decision can turn the case into an ugly court battle, which can be extremely expensive and damaging.
If you are considering a divorce that falls under high net-worth, it is a wise approach to speak to an attorney about your case immediately. Email the Law Office of Doppelt and Forney, APLC today at email@example.com or text (858)880-6689 for a free 30-minute consultation with our knowledgeable divorce attorneys in San Diego.