Everyone who goes through a divorce wonders how their life will change as a result, but high net worth individuals often have additional concerns that couples of more modest means may not encounter. Here are the answers to some of the most common questions about high-asset divorce.
How Can I Protect My Assets?
One of the biggest questions about high-asset divorce for individuals is how they can protect their assets. It can be difficult to face the prospect of potentially losing half of everything you have earned, but working with the right attorneys and financial advisors who have experience in these cases can help ensure your interests are protected.
Although assets that were acquired during the marriage are subject to an equitable (although not necessarily equal) distribution in the state of Maryland, you may be able to keep certain assets by offering your spouse something less important to you in their place. In many cases, you can negotiate with your spouse through your attorney or via mediation.
Can I Give Some of My Assets to Another Party for Safekeeping During the Divorce?
Some people who are going through a divorce are so concerned about keeping a particular asset that they may consider giving it to another party to avoid having it be subject to the division of property.
If you resort to this type of tactic and your spouse finds out about it, you could face a needlessly difficult road as the judge will view you unfavorably. The judge may also penalize you with fines and penalties if it is determined that you intended to hide legitimate marital assets from your spouse. Being honest and trusting a qualified high-asset divorce attorney to protect your interests is always the best way forward.
Will I Be Required to Pay Alimony?
Many high net worth individuals are concerned about how much alimony they may have to pay following a divorce. Also known as spousal support, this is the amount of money that one former spouse is required to pay to the other to maintain their standard of living following the divorce.
Several factors are considered in determining alimony, including the income and earning potential of each spouse, along with their age and health, the length of the marriage, and whether one of the spouses stayed home to take care of children from their marriage, or placed their career on hold to support the other spouse’s career.
Your high-asset divorce attorney can help you determine your likelihood of making spousal support payments and how much they could be. Although you may not have much control over this, the payments can be structured in different ways that work well for both parties. If this becomes necessary, your attorney will work with you to find the right solution for your situation.
How Will the Divorce Affect My Taxes?
Another concern in a high-asset divorce is the impact it will have on taxes. This question can be difficult to answer because affecting this outcome are many factors that vary from couple to couple. The couple’s earnings and how they earn money are major factors.
When joint assets are sold, such as a family home, or a large investment is cashed out to pay a divorce settlement to a spouse, it may be necessary to pay capital gains on the profits made from such sales.
In addition, the spouses must change their filing status from married to single once their divorce has been completed, which can affect taxes positively or negatively depending on the circumstances of the case.
Because this area of divorce is so complicated, most high-asset divorce attorneys work with professionals such as tax advisors to help spouses understand the potential tax ramifications of the choices they are considering as part of their divorce, such as selling assets.
Keep in mind that getting divorced will also impact your credit score. To keep any potential damage to a minimum, stay current with bills and payments throughout the divorce. When negotiating the division of joint accounts, it is important to address how outstanding balances will be paid off.
In some cases, it may be a good idea to open some new accounts in your name only to start building and controlling your credit independently.
How Will the Divorce Affect Our Children?
Perhaps one of the biggest concerns for any divorcing couple is what will happen to their children. No one wants to see their children put in the middle of two parents in a contentious divorce, but divorce may ultimately be the best solution for children who have been living with unhappy parents.
In Maryland, there are no firm rules stating who automatically gains custody of the children. Instead, the court will consider what is in the best interest of the child in awarding legal and physical custody.
Child support is calculated using mathematical guidelines established by the state; these consider each party’s gross income, alimony, the holder of physical custody, the costs of insurance for the children, and other expenses.
Contact the Experienced Maryland Family Law Attorneys With Questions About High-Asset Divorce
Ensure your rights are protected by working with the team at SIEGELLAW. Our family law attorneys have extensive experience in high-asset divorces and will work hard to help you achieve the most favorable outcome possible in your case.