Often, when a couple begins to talk about ending their marriage, the process of the breakdown of the marriage has been occurring for some time, whether each spouse realizes it or not. Many times, one of the spouses has already decided they want a divorce and has even put plans into place to protect their financial future, but has not shared those plans with the other spouse. This leaves the other spouse vulnerable when it comes to their financial future. This is a particular problem in high asset divorces.

Who Handles the Money?

It is not uncommon for couples to “delegate” to each other different chores or responsibilities. For example, one spouse may be the one that takes the lead on most of the home decorating decisions or oversees the majority of the couple’s social and family commitments. In most marriages, although one spouse may be the one “in charge” of the responsibility, the other spouse still has input.

This is especially true when it comes to the handling of marital finances. In many marriages, although the couple makes financial decisions together, the responsibility of making sure the bills get paid and watching over investments usually falls to one spouse. Although this system works for these couples, it can put the other spouse in serious financial jeopardy if the spouse who handles all the money decides to file for divorce.

It is rare that a divorce does not have some level of complexity involved. These complications become even more compounded if a couple has substantial assets that need to be divided. This is usually because the more assets and property there are, the more there is to fight over, especially if the divorce is an acrimonious one.

Many high net worth divorces involve real estate, stocks, trusts, business interests, jewelry, art, antiques, and more. In order to ensure that there is a fair and equal division of your marital estate, it is important to have a qualified and experienced high-asset divorce attorney representing you. The following tips can also help to ensure that the process goes as smoothly as circumstances allow.

There are many complex financial issues that need to be addressed in a high-net-worth divorce. Unfortunately, one of those issues is taxes. When marital assets are divided in a divorce, the IRS considers this income. This is why it is critical to have a skilled high asset divorce attorney advocating for you and ensuring your financial future is protected.

Spousal Support

Prior to 2019, spousal support payments were fully deductible for the spouse who was making the payments and the receiving spouse was required to claim the payments as income on their tax returns. However, for anyone divorced after January 1, 2019, the law was changed so that the spouse making the payments must pay taxes on this money since it is no longer deductible. The receiving spouse no longer has to report the payments as income.

Dependent Exemption

Whenever there are children in the marriage, a decision must be made in the divorce agreement over which parent will be able to claim the child as a dependent on their tax return. There are several common options that the court may order. For example, the parents may alternate years, where one parent takes the claim on even years and the other parent takes the claim on odd years. If the couple has more than one child, the option may be to “divide” the children on their tax returns.

When it comes to divorce, Texas is a community property state. This means that the marital estate is supposed to be divided 50/50. Unfortunately, many spouses do not feel that their spouse is entitled to half of everything the couple owns and will do all they can to prevent that from happening–even if what they are doing is illegal. If you suspect your spouse is hiding assets, there are steps you can take to determine how they are doing it and where the assets are. A skilled Austin complex divorce attorney can help.

Steps Your Attorney Can Take

During the divorce process, there are many types of legal documents and records that must be shared between both parties. Many of these documents are handed over during the discovery phase. All information exchanged between spouses is done so under oath and consequences of intentionally omitting or covering up information can result in serious consequences.

An attorney can also use written interrogatories as a tool to gain information from a spouse. A skilled attorney will know how to ask questions in a certain way in order to glean significant information from the other party.

One of the most contentious part of a high asset divorce is the division of assets. Although Texas is a community property state – which means all assets are divided 50/50 – it is not uncommon for some spouses to do everything they can to try to keep more of the marital estate “pie” for themselves by hiding assets. Other spouses commit asset dissipation. The legal definition of dissipation of assets is “The use of an asset for an illegal or inequitable purpose, such as a spouse’s use of community property for personal benefit when a divorce is imminent.”

In some divorces, the spouse will hide their asset dissipation, but in other cases, the spending is obvious. One of the more common obvious signs is when a spouse begins spending money from the marital estate on elective cosmetic surgery.

The Use of Marital Estate Funds for Cosmetic Surgery

It is quite common for a person going through a divorce to also begin to go through some physical changes, especially if they had been married for some time. They may begin working out more consistently, change the color of their hair, begin dressing in a different style, etc. In some cases, this self-improvement journey can also result in undergoing cosmetic surgery.