Divorce is rarely as simple as signing on the dotted line, shaking hands and parting ways. In high asset divorces, battles can wage on for months – or years. But when you have a lot to lose, you fight tooth and nail to protect it. That’s why it’s often best to take steps to prepare for a high asset divorce before you even drop the “d-bomb.”
Verify Your Assets
Gather any records, receipts or photos that verify your assets. Did you purchase your boat before marriage? Do you have the documents to prove that? Any separate property, inheritance, income and family gifts that you won will need to be verified during your divorce.
Examples of important records that you’ll want to gather include: loan documents, trusts, wills, financial statements, insurance inventories, property deeds, credit card statements, banking information, tax returns, and insurance policies.
Take Steps to Protect Your Business
If you own or have interest in a business, you may consider taking steps to protect the business from the divorce. It’s difficult to avoid involving the business in your divorce, but you can limit its exposure. Whether your business is small or large, there’s a good chance that your partners would rather not have your ex stake a claim in the business simply because you’re parting ways.
One way to avoid this is to create a shareholder agreement clause that puts a limit on the transferability of stock. The agreement can also contain details on business valuation methods and buy provisions that allow titled shareholders to maintain possession.
Find a Competent Professionals to Guide You through the Divorce
With a high asset divorce, there’s a lot at stake. Hiring a competent divorce attorney who has experience with these types of cases is important. It’s also important to work with an estate planning attorney and financial advisor to help ensure that your assets are protected.
Consider the Tax Consequences Associated with Asset Division and Support
Few couples – even those with a high net worth – realize the tax ramifications of asset distribution and support. Depending on the situation, the distribution of assets can lead to serious tax consequences. Work with an accountant or other financial professional to identify tax implications and prepare for them before the divorce.
High asset divorces are rarely simple. Taking steps to prepare before you even mention the “d” word can go a long way in helping you protect your assets. Know and verify your financial situation, take steps to protect your business, work with the right professionals, and don’t forget to consider the tax consequences of distributing assets and support.
The Micklin Law Group, LLC is a New Jersey law firm specializing in family law and estates. Attorney Brad Micklin was recently named to The National Advocates list of Top 100 attorneys from each state. To set up a consultation, call 973-562-0100.