Real Estate Concerns: Real estate is often one of the largest assets in a marital estate. Whether your real estate holdings are comprised of a marital home, vacation home, commercial property and/or investment property, you will need to determine what portion of the property is subject to division in a divorce. factors that judges look at when dividing real estate can include how long you and your spouse have been married, when the property was purchased and who contributed to the purchase or maintenance of the property.
Once your real estate is identified you will need to decide if you want to keep or sell the property. Couples may use valuations to determine how much the real estate is worth and then agree to sell the property and divide the proceeds. Sometimes, one of the couple will keep the property and buy out the other. It is important to evaluate your ability to maintain the real estate after the divorce, if you wish to hold onto it and buy out your spouse. If you and your spouse cannot agree, the judge will have to make the decision on what to do with the property, so it’s always in your best interests to try and work it out.
Businesses, Partnerships and Professional Practices: High net worth couples frequently are business owners or have a professional practice such as a medical or legal practice. Figuring out how to fairly divide these types of assets can get extremely complex. If you or your spouse owns and operates a business, then the business will probably require a formal evaluation and report. Professionals such as forensic accountants and actuarial experts are used to determine the fair market value of the business. A thorough inspection of the business site, records, books, general ledgers, payroll registers, receivables, machinery, inventory, real estate, client lists, partnership interests, enterprise and goodwill will be done. Even more confusing, if you owned the business prior to your marriage, it will need to be determined if the business even is a marital asset. If it is, then your spouse’s marital portion would have to be calculated.
Seek professional advice from your attorney, financial advisor and tax professional to help you develop the right arrangement with your spouse. such as a buy-out, sale, annuitized settlement or other distributive arrangement.
Stock Options: People with high income or high profile employment frequently receive stock options as part of their compensation. There are definite complexities involved in distributing these assets in a divorce matter. Your stock options need to be evaluated to identify the grant date and vesting schedule to determine which assets are subject to equitable distribution. Your settlement agreement may include a constructive trust to address the tax effects of your stock option distribution. It can also safeguard all post-judgment options while still protecting your pre-distribution interests and rights. Again, it is recommended that you discuss your options with your financial professional and your divorce professional to ensure fair and accurate evaluation of these assets.
Retirement Assets: If you or your spouse has a pension, IRA, 401k or any other type of retirement account, those accounts will most likely be subject to equitable distribution in your divorce. A common misconception when going through a divorce is that if the account is maintained in your exclusive name then your spouse has no right to claim a share. In New Jersey, this is simply not true in most circumstances. Generally, the value of your retirement account accumulated from the date of the marriage to the date that the complaint for divorce is filed will be subject to division. This also generally holds true for pensions, deferred compensation plans, SEPs and SERPs as well.
These assets may not be physically split at the time of the judgment of divorce and you may need a domestic relations order or QDRO. These domestic relations orders will help ensure that you receive the proper share and accurate benefit amount due you at an established future date. Talk with your attorney and your plan administrator.
Understanding Your Options: Whatever your assets or income, if you and your spouse are going through a high net worth or high income divorce, get educated. Speak to an attorney experienced in these types of complex divorces; they can make you aware of options for valuing and selling property to help ensure a fair division of your property. Know that it will take some time to properly value all of the holdings that you and your spouse may have, but in the end, a thorough review is necessary to properly advise you and ensure that the end result is equitable for you both.
If you have filed for divorce and are looking for advice regarding your high net worth or high income, please contact us today to schedule your initial consultation with one of our qualified attorneys experienced in dealing with high net worth divorces.
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Getting Divorced When You are a Business Shareholder or Investor