What Makes a High Asset Divorce Different?

 Posted on January 10, 2020 in High Asset Divorce

Planning for a divorce is complex no matter what kind of property you own with your spouse. To be sure, even when a couple owns relatively few assets and has a limited amount of debt that will be classified as community property under Texas law, accurately identifying and valuing property can still be complicated. Yet these processes are significantly more difficult and complex in a high asset divorce. And it is not just increased complexity surrounding the division of community property that can make a high asset divorce different. In addition to the division of community property, maintenance or alimony can also have significant implications for your taxes.

Our Texas high asset divorce lawyers want to help. The following are a few key ways that a high net worth divorce is different from other divorces.

More Money Means the Stakes Are Higher

While there is no set monetary figure to define a high asset or high net worth divorce, we typically use this term to talk about divorces in which the couple has $1 million or more in assets. Austin is a city where married couples have family roots for generations while also being a place where musicians and artists have decided to live. Accordingly, there are many married couples in and around the Austin area who might qualify for a high asset divorce. When a divorce involves millions of dollars, the stakes are simply higher.

Expert Appraisals or Valuations May Be Necessary

High asset divorces often involve assets that are difficult to value or appraise for the purposes of dividing community property. For instance, many wealthy couples in the Austin area own valuable art collections, rare books and music memorabilia, automobiles, and expensive instruments that are difficult for a court to place a proper value on without help from an expert (or multiple experts). As such, if you are anticipating a high asset divorce, you should be prepared to work with expert appraisers who can provide proper valuations for your assets.

Forensic Accountant May Be Crucial in the Divorce

In some high asset divorces, especially those in which one of the parties was the primary breadwinner, that spouse might attempt to hide assets to prevent them from being classified as community property and divided in the divorce. While many middle-class families simply do not have the kind of resources that would allow one of the parties to hide assets without them being noticed immediately, a wealthy couple may have substantial assets that can be hidden by one of the parties. There are various ways a party might attempt to hide assets, such as “gifting” them to a business partner or moving funds into separate accounts. A forensic accountant may be crucial to locating hidden assets and ensuring that the court properly classifies and divides them.

Tax Implications Can Be More Significant

Although it is difficult for a spouse in Texas to receive alimony under the Texas maintenance law, when maintenance is awarded, it can have a significant impact on the spouse who pays it. Under current U.S. tax law, the spouse who makes alimony payments also pays taxes on that money. In addition to maintenance, depending upon how the court divides community property, simply acquiring certain high-value property can also have major tax implications.

Contact an Austin High Net Worth Divorce Attorney

Do you have questions about high net worth divorces in Texas or do you need assistance starting the divorce process? An aggressive Austin high asset divorce attorney at our firm can help. In addition to working on financial issues, a complex child custody attorney or complex litigation attorney can help with your divorce. Contact Powers and Kerr, PLLC online or call our firm at 512-610-6199 today.

Source:

https://statutes.capitol.texas.gov/Docs/FA/htm/FA.6.htm