Going through a divorce is never an easy experience. However, when you and your spouse share a significant amount of wealth, your case becomes more challenging and complex to manage.
From multiple joint business value appraisals to entanglement of investment assets, your divorce will require meticulous planning and negotiation from you, your spouse, your financial advisors and your lawyers.
What is a high asset divorce?
Also referred to as “high-net-worth divorce”, these types of divorces are generally characterized by a substantial wealth of at least $1,000,000 in liquid assets. Five common examples of these include cash in hand, bank accounts, stocks, mutual funds and exchange-traded funds.
How does California divide marital property?
California is a community property state, which means all acquired assets and debts during the marriage will be considered by the courts as marital property. During this property division process, the judge will seek to distribute your marital property 50/50.
Six common types of these include:
- Income from employment
- Real estate property
- Business properties
- Stock or investment portfolios
- Joint bank accounts
- Pensions
Any ongoing debt or loan from either you or your spouse is also a marital property and will be subject to property division.
What common mistakes should I look out for?
While your divorce proceedings may be emotionally challenging to go through, it is also important to consider how your property division can affect your hard-earned finances in a significant way. Here are two common mistakes to look out for:
- Overlooking hidden assets: High-net couples will typically own various offshore accounts and have high value properties named under their business entities. It is important not to overlook these types of assets to prevent an unfair division of marital property.
- Ignoring tax implications: While a 50/50 split may seem like a simple concept on the surface, the tax implications of your assets can change their real market valuations. For example, when you and your spouse sell off your real estate property, the sales from it can trigger property transfer tax and other fees.
Divorce is a scary experience to go through on your own. However, by approaching your case with careful planning and focusing on your long-term goals, you can navigate the process with determination and minimize any legal hurdles along the way.