Most divorces are relatively straightforward, but when significant assets are involved matters become more complicated. A high-asset divorce is generally characterized as one in which marital assets are valued at $1 million or more.
In many cases, couples in high-asset divorces may own a family home as well as vacation homes and luxury cars, and they may have very complex assets such as investments and retirement accounts. This type of divorce becomes far more complicated as forensic investigators, business valuations and other additional expertise may be needed when dividing assets.
Organizing Assets for a Divorce
One of the more difficult aspects of a high-asset divorce is identifying and valuing assets. There is a lot of pressure to ensure that assets are listed correctly in order to protect everyone’s financial interests and avoid the potential penalties associated with hiding assets.
Courts may exclude certain types of property from the marital category, such as that which a spouse acquired through an inheritance or a gift from a third party, or if the spouses have a valid agreement in place that expressly states the property is non-marital.
Both parties should compile and provide a list of their assets to their attorney. This may be difficult in cases where one spouse manages the family’s finances and the other is unaware of their financial overview. In this case, a spouse or their attorney may hire a forensic investigator to gain a more accurate picture of what is at stake.
The assets in a high-asset divorce may include:
- The family home/marital residence
- Vacation homes
- Rental properties
- Primary vehicles
- Other vehicles, such as collectibles
- Boats or aircraft
- Retirement accounts, such as Roth IRAs or 401ks
- Jewelry, including engagement and wedding rings
- Stocks and other types of investments
- Savings accounts, including college funds
- Collectibles, such as artwork and antiques
- Any increases in value of assets that were owned prior to the marriage whose initial value is considered separate property
- Oil and mineral rights
There are some types of assets couples may have in a high-asset divorce that require special attention to valuation. These include:
- Stock options and other types of deferred compensation
- Residential and commercial investment properties
- Legal, medical or other types of professional practices
- Businesses and business ownership interests
- Publishing contracts, manuscripts and screenplays
Although it is important to disclose all of these assets to attorneys, valuation experts will be required to accurately assess them and identify the extent of each party’s ownership in jointly owned assets.
How a Divorce Affects Your Main Assets
It is important to keep in mind that although the assets acquired during the marriage must be divided between spouses, the property division statute in Maryland requires those assets to be distributed equitably, which is not always a perfectly equal split. Instead, judges aim to divide property fairly.
Keep in mind that you will be allowed to keep your own separate property and that any debts you have will not be subject to the same equitable distribution as assets.
There are many different ways that property division can be worked out between a divorcing couple in a high-asset divorce. For example, one party may be granted the family home while the other may be granted the vacation home. Another option is to sell a vacation home for money that can be split between the couple.
Avoid Hiding Assets
Although it may be tempting to hide assets with the hope of protecting them in a divorce, this will often backfire. Among the many disclosures in the divorce process is a signed affidavit listing your assets and their value. If you are dishonest in this statement, you could be accused of perjury because these statements are provided under oath.
Should you fail to disclose any assets or mislabel them, your spouse’s forensic accountant could find them by looking through financial information to identify the acquisition date or purchase date of the asset. Their work can be presented to the judge in your case, and it may prompt your assets to be reevaluated and redistributed. There may also be penalties if you are found to be at fault for purposefully misreporting assets or hiding them.
It is also important to avoid misrepresenting assets, such as claiming that a spouse’s personal vehicle is actually a business vehicle.
What Happens if a Spouse Wastes Marital Property?
If one spouse uses property for a reason that is not related to the marriage while the marriage is breaking down irreparably, it is known as dissipation and a court will reconcile this spending when making the property award. This could occur if, for example, an unfaithful spouse spent marital funds on an expensive vacation with a boyfriend or girlfriend during the marriage.
Schedule a Consultation With the High-Asset Maryland Divorce Attorneys
If you are currently part of, or considering, a divorce that involves considerable assets, the experienced Maryland divorce attorneys at SIEGELLAW can provide valuable guidance on the specific concerns you will face throughout the process. Contact SIEGELLAW today to schedule a consultation to discuss your high-asset divorce.