High Asset Divorce: What to Consider Before Filing for Divorce

If you are ending your marriage in California, you may want to become familiar with the divorce laws in the state. California is a community property state, which means all marital assets are jointly owned by the couple and are split 50/50 in a divorce. 

This can be a complicated situation for those who have amassed millions of dollars by owning a business or being a celebrity of sorts (actor, musician, athlete, etc.). Splitting half of your earnings with your spouse can be problematic in a number of ways. This is called a high asset divorce.

A high-asset divorce is one that has at least a few million dollars in assets. The standard used to be informally set at around $1 million, but nowadays, it is common for middle-class households to have $1 million in assets if you include their home and IRA accounts. 

As you can see, there is a lot at stake in a high asset divorce. A lot can go wrong, and you want to make sure you get your fair share. You need an experienced lawyer on your side to help, and that’s where The Law Offices of David M. Lederman comes in. Here is a look at what you need to know and what mistakes you need to avoid.

Considerations in a High Asset Divorce

• Asset identification. You will need to identify and list all assets, including real estate properties, investments, business interests, retirement accounts, stocks, bonds, vehicles, jewelry, and art.
• Valuation of assets. Determine the fair market value of each asset. This may require the assistance of financial experts, appraisers, and accountants.
• Existence of prenuptial or postnuptial agreements. Is there a prenuptial or postnuptial agreement in place? If so, review it regarding the distribution of assets in the event of divorce.
• Spousal support. Assess whether one spouse is entitled to spousal support based on the disparity of income, earning potential, and financial needs of each spouse.
• Child custody and support. Determine child custody arrangements and calculate child support payments based on the needs of the children and the financial capabilities of each parent.
• Tax implications. Consider the tax consequences associated with the division of assets, particularly for high-value assets like investments, real estate, and retirement accounts.
• Business interests. Evaluate any shared business interests and determine how they will be divided or if one spouse will buy out the other’s share.
• Debts and liabilities. Determine how debts and liabilities will be divided between the spouses, including mortgages, loans, and credit card debt.
• Legal representation. Seek experienced legal counsel specializing in high-asset divorces to ensure your rights and interests are protected throughout the process.

Mistakes to Avoid

High asset divorces can be costly if you’re not prepared.. Here are some common mistakes to avoid. 

• Not hiring experienced professionals. Hiring experienced professionals such as divorce attorneys, financial advisors, and forensic accountants is crucial to protecting your interests and ensuring the fair distribution of assets.
• Ignoring tax implications. Failing to consider tax implications can result in significant financial losses. Consult with tax experts to understand the tax consequences of various asset division scenarios.
• Being overly emotional. Emotions often run high during divorce proceedings, but decisions should be based on logic and reason rather than emotion. Avoid making impulsive decisions that could have long-term financial consequences.
• Hiding assets. Concealing assets during divorce proceedings is illegal and can lead to severe penalties. Full financial disclosure is required.
• Not considering future financial needs. You need to think about your future, especially if you have children or are nearing retirement age. Ensure that the divorce settlement adequately addresses your long-term financial security.
• Rushing the process. Divorce proceedings can be lengthy and complex, especially in high-asset cases. Rushing the process in an attempt to finalize the divorce quickly can lead to oversights and regrets.
• Ignoring non-financial assets. While financial assets are important, non-financial assets such as business interests, intellectual property, and pension rights should also be considered. 

Contact Us Today

High asset divorces are complex. There is a lot of money and assets at stake, which can lead to tension, frustration, anger, and conflicts, especially if there is no prenuptial agreement in place. If you’re going through a divorce with considerable assets, don’t hesitate to contact the Offices of David M. Lederman today.