The process of getting divorced is an emotionally-draining experience, one that is often exacerbated when the couple has high net worth assets. Deciding on how to best split assets, property and child custody can have long-term effects on both parties. Other issues such as alimony and whether any prenuptial or postnuptial agreements are in place further complicate matters.
When dealing with such high stakes, it’s important you have a knowledgeable and experienced Denver divorce attorney on your side to explain the nitty-gritty details and how they can affect you in the long run.
Prenuptial and Postnuptial Agreements
Did you have a prenup in place before getting married? While these agreements are frowned upon by romantics, it’s a good practice to protect your assets, especially if you have valuable property, have children from a previous relationship, own a business or are expecting to inherit a significant sum of money.
Having a prenuptial agreement makes the divorce a bit easier as it outlines the terms and conditions of protecting the assets you accumulated prior to getting married. The assets you accumulated during marriage will be then divided between the two parties.
Don’t have a prenup? Postnuptial agreements work in a similar way as prenups. However, they are drafted after marriage. Nearly half of all marriages in the U.S. end in divorce, so it’s wise to protect your assets in the unfortunate event of divorce.
High Net Divorce Overview
In Colorado, common law also known as equitable distribution is followed. While Colorado law aims to distribute assets fairly, sometimes one spouse may end up at a disadvantage. In the case of dividing up property, generally the higher-earning spouse receives a larger portion. An experienced divorce lawyer will know the ‘in’s and out’s’ of dividable assets to ensure you get your fair share. A few things to be aware of in a high net worth divorce include:
Hidden assets. Your divorce attorney should help to comb through all assets, particularly hidden assets such as insurance policies, mutual funds and personal property (valuable jewelry, vehicles) that can be divided.
Alimony. Alimony, also known as spousal support, is an amount determined by the judge. If one spouse earns significantly more money than the other, there’s a good chance that spousal payments will need to be made.
Long and short term tax considerations. Careful examination of both short term and long term tax implications is necessary during a high net worth divorce. For example, investments such as stocks and mutual funds and real estate have differing financial values and tax implications in the immediate future vs. the long run. Typically, transferring of assets is not a taxable event under IRS guidelines. However, assets accrued during marriage such as stocks, bonds, and mutual funds will be subject to capital gains.
With a high net worth divorce, it’s imperative you have an experienced Denver divorce attorney working on your behalf to ensure the distribution of assets is done as fairly as possible. At Tolison & Williams, we have dedicated attorneys with years of experience in family law and strive to provide personalized service at affordable prices.