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.

In the absence of a pre or postmarital agreement, a couple who has decided to divorce and who owns businesses will need to decide how those assets will be divided, which will also require an accurate business appraisal. These appraisals are conducted by experts, but it’s still important to carefully review them for accuracy. However, the technical language of these documents can make their review a difficult process, so if you are considering divorce and own one or more businesses, it is important to retain an experienced Austin, TX high asset divorce lawyer who can go over the appraisals with you and ensure that the terms of any property settlement agreements are fair.

Professional Standards

Before requesting a business valuation, it is important for divorcing couples to ensure that the appraiser is qualified to perform the analysis and has the proper credentials. There are three main professional associations that issue valuation standards for appraisers: the American Society of Appraisers, the American Society of Certified Public Accountants, and the National Society of Certified Valuation Analysts. Ensuring that your own appraiser has been credentialed by one of these groups is one of the first steps that a divorcing couple should take when seeking an appraisal.

Clarity and Thoroughness

Once a business valuation has been completed, the appraiser will create and submit a valuation report. Upon review, this report should be clear as to the purpose of the appraisal and include information about:

Marriage is not just an emotional partnership, but has a financial component as well. This can add an extra layer of complexity during the divorce process, as it requires the parties to identify, appraise, and divide their assets fairly before a judge will officially dissolve a marriage. For help reaching a property settlement agreement during your own divorce, please contact our high asset divorce legal team today.

Identifying and Characterizing Marital Assets

Generally, the property accumulated by a couple during their marriage belongs to both spouses and so must be divided equitably upon divorce. It is impossible, however, for a couple to come up with a fair property settlement if the parties do not have a thorough understanding of what types of property each is bringing to the table.

While identifying and characterizing marital assets may seem like a straightforward process, it can actually be quite difficult, especially because some assets, even when acquired during the marriage, are actually considered to be separate property. For instance, inheritances and gifts given to one spouse during a marriage will usually stay in that person’s sole possession even after divorce. Failing to account for these assets as separate property could result in a couple unfairly sharing the asset, while improperly characterizing an asset as separate in nature, could leave one spouse without his or her fair share of marital property.

Although some couples quickly follow up the decision to end their marriage with a divorce filing, it is also not uncommon for couples to carefully consider this option over a period of weeks or months before officially filing for divorce. Those who take the latter route have the benefit of extra time in which to plan for the termination of their marriage, which can make all the difference in how smoothly the later divorce actually proceeds. This is especially true for couples who have unique or particularly valuable assets, as accounting for, appraising, and ultimately dividing these assets can take a significant amount of time. To learn more about how an experienced high asset divorce attorney can help you plan for your own pending divorce, please contact our legal team today.

Planning for Alimony

As a result of changes made to the tax code last year, divorced spouses who pay alimony are no longer permitted to deduct those payments come tax season, while spouses who receive these payments can no longer count those payments as income. Knowing how, and planning for, these changes will affect a couple’s own financial situation after divorce is important to the success of the negotiation process. For instance, divorcing couples who properly plan before litigating a divorce could redistribute their assets in such a way that they are able to regain some of what they will lose as a result of the new alimony legislation. The spouse, for example, who is the higher earner could retain the couple’s taxable assets, such as cash, stocks, and bonds, while the lesser earning spouse could retain the tax-deferred accounts like 401(ks) and IRAs.

Accounting for and Appraising Assets

Couples who own extensive, unique or especially valuable assets usually have a more difficult time accounting for, characterizing, and appraising all of those assets. Beginning this process ahead of time can help couples avoid some of the stress that goes along with dividing up a marital estate. Hiring a forensic accountant and other financial specialists can also play a crucial role in ensuring that no assets are improperly appraised or are unaccounted for during the property division process. Compiling documentation related to ownership and value can also be accomplished in the planning stage, which can save time later on in the proceedings.

Many people know that dividing up marital assets is one of the most difficult aspects of divorce, as appraising and determining who will retain which assets is a complicated process. However, few couples realize that one of the most complex aspects of the property division process is actually having to account for the tax implications of retaining or transferring certain types of property. To learn more about the tax-related issues that you should take into consideration during your own divorce, please contact an experienced high asset divorce attorney who can advise you.

Tax-Free Transfers

Couples who have filed for divorce and are in the middle of the property division process should remember that only property transfers that are made within one year after the dissolution of a marriage are considered income tax-free. No deductible loss or taxable gain can be declared during this time period, although once a year has passed, any transfers made by either party can be evaluated by the IRS.

Alimony Payments

Under recent changes made to the U.S. tax code, alimony payments will no longer be tax-deductible for the payer and will also no longer qualify as taxable income for the recipient. For these reasons, couples who are in the midst of a divorce should think carefully when negotiating a settlement involving alimony payments.

One of the factors that sets high asset divorces apart from many other divorces is the practice of hiding assets. Fortunately, there are steps that divorcing parties can take to discover and report attempts by their spouses to hide assets. However, taking these steps usually requires the assistance of professionals, including a forensic accountant and a high asset divorce attorney, both of whom can help track down assets and thereby ensure that any settlement agreements entered into by the parties account for all of the couple’s property.

Utilizing the Discovery Process

Couples who litigate their divorces are required to provide each other with copies of important documentation and to submit to questioning. By requesting the production of documents and issuing interrogatories, a high asset divorce lawyer can help get to the bottom of a couple’s financial situation, as parties who refuse to produce documentation as ordered, or who lie while under oath, face strict penalties.

Following Paper Trails

Divorcing spouses attempt to hide assets in a number of different ways, including:

While investing can be an extremely profitable means of earning passive income, it can also create difficulties for couples who decide to dissolve their marriage. This is because investments entered into after a marriage takes place, whether they take the form of ownership in a business interest, or the ownership of stocks, bonds, or a retirement fund, must be accounted for and divided upon the dissolution of a marriage. This can cause a number of complications, especially for those who are not represented by an experienced high asset divorce lawyer who can take steps to ensure that the property division process goes as smoothly and quickly as possible.

Assessing Your Options

Whether a couple invests in the stock market, cryptocurrency, or real estate, they will need to address who will retain ownership of those assets before a divorce can be finalized. This can make an already difficult process much more complicated. Fortunately, there are certain options and strategies that can help couples protect themselves during the divorce process, not only emotionally, but also financially.

For instance, many couples with significant assets who decide to divorce attempt the collaborative divorce process, which can help minimize conflict through the pursuit of open and honest communication in an out-of-court setting. Collaborative divorces also help ensure that couples are able to decide the fate of their own property. Alternatively, couples could also choose to attempt mediation, or could even enter into a post-nuptial agreement regarding property division, which is a popular option for those who believe that their marriages are in trouble, but have not yet committed to divorce.

One of the things that sets many high asset divorces apart from other divorces is the ownership of business interests by one or both spouses. Owning these types of assets can make the property division portion of high asset divorces much more complex, so if you and your spouse have decided to get divorced and either one of you owns a business, it is important to contact an experienced high asset divorce attorney who can help protect your interests.

Do Not Delay

Dissolving a marriage can be a lengthy, costly, and emotional process, so it is not uncommon for many couples who decide to end their marriages to delay actually filing for divorce. While this can temporarily delay the potential difficulties that often come with divorce, it will not eliminate them and can actually end up complicating the divorce process itself. For instance, Texas is a community property state, which means that all of the assets acquired by a couple during the course of a marriage are subject to equitable division. This includes not only assets like real estate and personal possessions, but also any increase in their company’s revenue, profit, and income, so the longer a couple waits to dissolve their marriage, the more they may end up needing to divide during the property division process.

Keep Detailed Records

One of the best ways to ensure that any divorce-related property settlement agreement is fair is to provide the court with detailed business records. These records, including bank statements, invoices, contracts, and bills related to monthly expenses can help establish the value of the business in question, as well as its equipment and assets. Pay stubs and paychecks can also be used to establish income, which can play an important role in determining child support and alimony.