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Recent Blog Posts
Study Shows Wives Take Hardest Financial Hit in High-Asset Divorces
According to a study conducted by the Institute for Social and Economic Research (ISER), husbands, especially fathers, benefit much more financially from divorces than wives. The study, Marital Splits and Income Changes over the Longer Term, revealed that when high-asset couples divorce, a husband's income increases by one-third of what it had been while married. However, a wife in a high-asset divorce can actually lose a significant amount of income, and this loss can last for years.
In addition, the loss of income for a woman who has gone through a complex divorce is even more profound if the couple has children. Typically, a wife has given up—or significantly slowed down—her high-earning career in order to take on the primary responsibility of raising the couple's children. Hence, this can cause quite a hardship when, years later in an attempt to re-enter the workforce after the divorce, a wife is unable to find a job at the same level as the one she gave up years ago.
Could Your Spouse be Hiding Money in Bitcoin Purchases?
Often in complex divorces, one spouse attempts to hide income and assets from the other spouse in order to avoid a fair and equitable marital estate settlement. There are several ways this can be done, including transferring assets to separate accounts or put them in a friend's name, delaying payments of commissions or bonuses, not billing clients or creating phony expenses (in a business) and overpaying the IRS.
However, there is a new way for spouses to hide money, and it can be almost impossible to trace. Bitcoin is a new, digital currency that was invented in 2009. The currency does not use banks and there is no government involvement or oversight. There are no fees and users can remain anonymous. In fact, even the person who invented Bitcoin is anonymous. He is only known by his alias of Satoshi Nakamoto.
Federal Agency Finds Huge Tax Gap in Alimony Deductions and Payments
Alimony payments are part of the final settlement in many complex divorces. A recent study by the IRS has uncovered major discrepancies between alimony deductions and alimony payments on 2010 federal tax returns.
According to IRS rules, alimony that is paid to someone under a high asset legal separation or divorce agreement can be used as a deduction from a person's income for purposes of paying federal taxes. Conversely, a person receiving alimony payments under a legal separation or divorce agreement is required to report that money as income on their federal tax return.
Complex Divorce Negotiations: Know the Real Value of Financial Assets
When a couple is involved in a complex divorce, there are usually a number of financial assets that need to be divided up between the two. However, financial advisors recommend that people who are involved in high asset divorces really examine the actual worth of the asset they are fighting for or willing to concede to the other party during negotiations.
The value of an asset may change when it comes to liquidating that asset, depending on tax liabilities and/or depreciation values. For example, if a couple owns a home that has $1 million in equity and they also have a 401(k) account that is worth $1 million, the actual long-term value of those two assets is different.
Hiring a Private Investigator in a Complex Divorce
If you are involved in a complex divorce, you may find it necessary to hire a private investigator. There are several reasons why this could be beneficial to your case.
One reason may be because you suspect your spouse is cheating on you. A private investigator can help uncover infidelity which can then be used during divorce negotiations for issues such as spousal support. There are several ways an investigator can help prove your spouse is being unfaithful, including surveillance and uncovering deleted information, such as incriminating emails, from a computer's hard drive.
How Do Spouses Commit Financial Infidelity?
According to National Endowment for Financial Education, one-third of people admit to financial infidelity in their marriage. Income, bank accounts, purchases, cash, and other financial information are just some of the items that may be hidden from a spouse. Not only can this have consequences on a marriage, it can also have a direct bearing on any complex divorce settlements should the couple's marriage end.
There are several ways people can hide income and assets from a spouse in order to avoid including them in the marriage estate. A spouse who is going through a high asset divorce and suspects the other spouse has committed financial infidelity should consider the following:
Pet Custody in Complex Divorces
Statistics show that half of all marriages end in divorce. And according to the Humane Society, 62 percent of households in this country have pets. For many divorcing couples, those pets become part of complex divorce settlement negotiations, and can often turn as contentions as child custody disputes.
A survey conducted by the American Academy of Matrimonial Lawyers (AAML) revealed an increase of over 20 percent in the number of pet custody cases handled by family law attorneys. Many courts are now allowing pet custody cases, while others consider the pet to be an asset included in the matrimonial estate.
Why Do Powerful People Cheat?
A survey conducted by researchers from Tilburg University found that the more power someone has, the more likely he or she is to commit infidelity. Usually, the more power and success a person has, the larger the marital estate is, with many sources of high asset revenue. This is particularly important in a complex divorce where division of those assets need to be determined.
According to another study conducted by the National Science Foundation's General Social Survey, both men and women are cheating more frequently. Almost one-third of married men cheat and 20 percent of married women commit infidelity.
New Technology Makes Spying on Spouses Easier in Complex Divorce Cases
Unlike simple divorces, where negotiations regarding divorce settlement can wrap up fairly quickly, high-asset divorces or other complex divorce issues can require a great deal of investigation and research in order to get the best settlement possible.
As spy technology has become increasingly sophisticated and easier to use, more people are utilizing that technology to help build their divorce case. Individuals who think their spouse is cheating now have all types of tools at their disposal to track the activities of their spouse while also seeking evidence to use against the spouse in the complex divorce.
Complex Asset Divorce Couples Turning to Divorce Financial Planners
An increasing number of couples are trying to negotiate complex divorce settlements and are turning to divorce financial planners. Many attorneys representing wealthy clients in these high asset divorce negotiations are recommending the clients consult with financial planners before finalizing their divorce settlements.
Quite a few financial planners are adding divorce planning to their list of specialties. According to a survey conducted by the Financial Planning Association, 25 percent of planners have already done so and another 20 percent said they plan on offering the service to clients.
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