Protecting Your Property During a High Asset Divorce

 Posted on August 28, 2019 in Complex Property Litigation

Although divorce can be an emotional rollercoaster for the parties involved, proceedings can become especially contentious when there are disputes about ownership of significant, unique, or valuable assets. While prenuptial agreements can help clear up these disagreements, many couples fail to enter into these types of contracts, as they deem it unlucky to contemplate the end of a marriage before it actually begins. For help protecting your property during your divorce, please contact our experienced Texas high asset divorce legal team today.

Accounting for All Assets

One of the biggest mistakes that a divorcing couple can make is to fail to account for all of their assets, including:

• Current bank accounts
• Non-cash assets
• Future interests, such as pensions, start-up stock options, and business interests
• Inherited funds or goods
• Income earned prior to the divorce filing, but received later, including bonuses and recent paycheck retirement contributions

Identifying all of these types of assets can be difficult, especially for those who do not play an active role in managing their household finances, so it is particularly important for those who find themselves in this position, to speak with an experienced forensic accountant before proceeding with the property division process.

Tax Considerations

Couples who are looking to create a fair property settlement agreement should be careful to take the tax implications of their decisions into account. Many couples, for instance, fail to clarify whether they are dealing with pre-tax or post-tax funds, which can make a significant difference when it comes to a specific asset’s value.

For example, the spouse who receives the family home worth $500,000 will face a different set of tax-related issues if he or she chooses to later sell that house for profit than the spouse who instead agrees to receive future distributions from a $500,000 retirement account. Similarly, comparing taxable assets with nontaxable assets is a crucial part of the property division process.

Paying Attention to the Details

Ultimately, it’s important for couples who have decided to end their marriages to pay close attention to the details of the property division process. Failing to do so could result in one party giving up more than he or she needs to, or in not getting his or her fair share of the marital assets. For instance, some couples dip into retirement accounts early in order to pay off joint debt during the divorce process. While this may provide a temporary solution to financial troubles, it could have serious long-term repercussions on the parties’ retirement prospects. Furthermore, early withdrawal from certain types of investment accounts can trigger penalties and lead to an increase in taxable income, thereby making it more difficult to take advantage of valuable deductions.

An Experienced High Asset Divorce Lawyer in Austin, TX

For help protecting your own assets during a divorce, please contact the dedicated Austin high asset divorce lawyers at Powers and Kerr, PLLC by calling 512-610-6199. We look forward to helping you through each step of your case.

Sources:

https://www.businessinsider.com/how-to-protect-money-divorce-2017-1

https://www.cnbc.com/2016/01/17/breaking-up-is-hard-to-do-protecting-assets-in-divorce.html