Have Wealth and Divorcing? Know the Issues
Wealth and divorce are a combination with a high potential for conflict. Many divorcing couples clash over money, but it can get much worse when the stakes are high and both sides have a lot to lose.
If you hold significant assets, you need a solid strategy for protecting your finances during divorce. You may want to look into the following high-net-worth divorce considerations.
Separate vs. Marital Property
Generally, all the assets you gain during marriage, including real estate, businesses, IRAs, and other investments, count as marital property and are subject to division during divorce. In contrast, assets you acquired before your marriage and kept separately, as well as inheritances, gifts, and some settlements and benefits, are separate property and aren’t part of the marital estate.
In addition, you and/or your spouse may hold assets you defined as separate in a prenuptial agreement. Spousal support and prenuptial agreements are another issue to consider as you prepare for divorce.
Hidden Assets
Having wealth and divorcing also means you should keep an eye on your assets to ensure your spouse isn’t trying to conceal property. For example, as soon as your spouse understands the marriage is over, they may start siphoning money from your joint accounts into an offshore trust.
Pay attention to red flags like inexplicable cash withdrawals or transfers, incomplete financial records, or a sudden decrease in your spouse’s income. If you suspect your spouse is concealing assets, your next step should be finding qualified divorce lawyers for wealth management.
Tax Implications
You’ll also need to consider the tax implications of high-asset divorces. For example, if you retain real property as part of your asset division, from now on, you’ll be solely responsible for property taxes and rent taxes if it’s investment property.
Divorce-related property transfers are generally tax-free. However, you must maintain careful records of any transfers because you need to note the cost basis for capital gains tax on any property you sell after divorce.
Businesses, Intellectual Property, and Patents
Property division becomes even more complicated if you run a business or hold intellectual property jointly with your spouse. You may need to decide what to do with your joint venture, like selling the business and splitting the proceeds. Alternatively, one of you may buy out the other’s share.
Patents and other intellectual property are also part of the marital estate if acquired during the marriage. This means that if one spouse holds a trademark or patent, the other may be entitled to some of the profits from the intellectual property and awards from infringement lawsuits.
Karen Ann Ulmer, P.C.: Protecting Your Wealth During Divorce in PA and NJ
Are you divorcing and wondering what to do about personal wealth? You need a legal professional to protect your financial interests and peace of mind.
The skilled lawyers of Karen Ann Ulmer, P.C. can guide you through the division of assets in a complex divorce and help you reach a fair agreement. Call (866) 349-4907 or schedule a consultation online.
