Most married couples own assets together, and how they will be divided in a divorce is often one of the biggest questions. While many divorces will be straightforward, couples who have significant assets will be involved in what is known as a high-asset divorce. This type of divorce will have additional considerations that can make the process more complicated.
Here is a look at what qualifies as a high-asset divorce and how this status can affect the proceedings.
What is a High-Asset Divorce?
A high-asset divorce is one that involves marital assets that have been valued at more than $1 million. These types of divorces usually involve ownership of a family home, one or more vacation homes, and luxury vehicles. They often involve complex assets such as investments, businesses and high-value retirement accounts. The high value of these assets often requires the use of forensic investigators, evaluations of assets and can result in a lengthy division of assets process.
In Maryland, an increasing number of divorces are falling under the category of ultra-high-asset divorces. These are divorces that involve more than $30 million worth of assets and are among the most complex types of divorces from a division of property standpoint.
Preparing for a High-Asset Divorce
One of the most important steps that spouses can take when they are contemplating a divorce is organizing and listing their assets. This information will be incredibly valuable for a divorce attorney to gain a clear picture of what is at stake.
This list should include every asset that was acquired during your marriage and that is owned equally between you and your spouse. This may include a family home, rental properties, vacation homes and any businesses that you own.
Vehicles such as cars, planes and boats should be listed, as should collections such as artwork or jewelry owned by either party, including engagement rings and wedding bands. Stocks, investments, savings accounts, college funds and retirement accounts must also appear on the list. If you and your spouse have any credit or loan debt, be sure to make a list of this as well.
How a High-Asset Divorce Affects Your Property
Outlined below is a brief overview of how a high-asset divorce affects the property of a couple.
Division of Property
In Maryland and many other states, any property that was acquired during the couple’s marriage is marital property and therefore subject to equitable (but not necessarily equal) distribution. In a divorce, inheritances and gifts from third parties are treated as separate property and will remain with the spouse who received them.
This may seem straightforward, but there is a gray area in cases where separate property is commingled with marital property, such as when one spouse uses funds obtained via inheritance as a down payment on the couple’s home.
Spousal Support Payments
In many high-asset divorces involving long-term marriages, spousal support payments will be ordered when there is a sizable difference between the incomes of the spouses. Calculating the amount of spousal support to be awarded can be very complicated in a high-asset divorce as such cases often involve various business interests that make income difficult to determine.
Retirement Accounts and Pensions
In high-asset divorces, there may be substantial pensions and retirement accounts at stake. Every type of retirement account is subject to its own set of rules, and it is also important to divide retirement funds in a manner that does not have negative tax repercussions. Therefore, it is essential to work with a family law attorney who is experienced in high-asset divorces and can provide guidance on the best way to divide retirement accounts.
When there are significant assets at stake, one spouse may attempt to hide certain assets to avoid having to share them with the spouse they are divorcing. For example, they may conceal belongings or transfer property or money to a family member, who will hold it for them during the divorce and return it to them once it has been finalized.
It is important to keep in mind that attempts to hide assets are often uncovered by attorneys or forensic accountants and can destroy an individual’s credibility with the judge on their case. Therefore, although it may be tempting to hide assets, particularly when one spouse was in charge of the couple’s finances and the other is largely unaware of the extent of their wealth, a far better course of action is to enlist the services of a high-asset divorce attorney to protect property without resorting to illegal tactics.
Contact the Maryland High-Asset Divorce Attorneys at SIEGELLAW
Hiring an experienced family law attorney is essential for high asset divorce cases. If you are contemplating a high-asset divorce, the attorneys at SIEGELLAW are well versed in managing the financial issues involved in these complex cases. Contact us today to schedule a consultation.