Divorces that involve significant wealth often come with added complications. These cases are not just about ending a marriage. They involve untangling financial ties that may have grown over many years. The higher the value of the assets, the more challenging it can be to divide them fairly.
Here are some key factors that make high-asset divorces more complicated.
Valuing complex assets
One of the biggest challenges in a high-asset divorce is determining the value of certain assets. These may include business interests, investment portfolios, real estate, retirement accounts and stock options. Some assets may fluctuate in value or be difficult to appraise. Others may be tied to future income or long-term investments.
Dividing marital and separate property
In any divorce, the court must separate marital property from separate property. This becomes more difficult in high-asset cases. Property acquired before the marriage is usually separate. Property obtained during the marriage is usually marital. However, in long-term marriages, assets can become commingled. For example, one spouse may contribute to the other spouse’s business that they started before the marriage. Determining what portion is marital and what portion is separate can be a major source of conflict.
Tax consequences and long-term planning
High-asset divorces often involve decisions that carry significant tax consequences. Selling property, transferring investment accounts or cashing out retirement funds can all trigger taxes. Planning for the financial future after divorce is also more complex when large sums or diverse assets are involved. Spouses may need to consider how divorce will impact their standard of living, estate plans and long-term financial goals.
Each of these factors adds a layer of complexity that is not as common in lower-asset divorces. The more assets that are involved, the more there is to evaluate and divide. That’s why it’s so important to seek legal guidance as you move toward divorce.