Many couples merge their finances after marriage as two people become one household. Owning things together and having one bank account can simplify things while a couple is married. However, once the couple decides to divorce things get complicated. This is especially true in a high asset divorce.
A prenuptial agreement is one of the best ways to protect assets. If you are going into a marriage with a lot of money, then having this document would be a good idea. A prenup outlines how assets are to be split in a divorce. This allows you to determine asset division ahead of time, so there are no surprises.
If you wait until after you are married, you can still protect assets with a postnuptial agreement. A postnuptial agreement is a good option if you come into money or assets after you get married.
Without one of these agreements in place, though, your assets are at risk of being split. There are ways to protect them to some degree. Here’s a look at what you should do to get the best outcome.
How to Protect Yourself During a High Asset Divorce
Hire a Lawyer
This is not something you want to do on your own. You definitely want to have an experienced lawyer who has expertise with high asset divorces on your side. They can help you understand your legal rights and develop a strategy ensuring you get as much of your assets as possible. A good lawyer can negotiate on your behalf.
Obtain Valuations
Do you really know how much your real estate and investments are worth? Most likely, no. Some people undervalue their assets, while others greatly exaggerate their value. In any case, you need to know the value of your assets so they can be divided fairly. You do not want to assume. Your lawyer can connect you with appraisers and other experts who can help.
Protect Your Business
Many people own businesses. If you own one, it is essential to protect it. You will need to take steps to safeguard your business assets as well as your intellectual property. The business will most likely need to be valued. You will also need to come up with a plan to determine how your spouse will get their share of the value of your business. Are you going to sell it? Are they part owners so you will need to negotiate a buyout? Will they share ownership with you?
How to Split Pensions/Retirement Accounts
If your pensions and retirement accounts are marital property, they may be subject to a division as part of your divorce decree. If you have a pension, you may reach an agreement with your spouse to buy out their share by offering them a lump sum based on the pension’s present value. If you have a 401k or IRA, the court might order that half of the money in those accounts must go to your spouse. You will need to have a qualified domestic relations order (QDRO) in place to enforce the division of 401k assets. Your lawyer can help with this process.
Open a Separate Bank Account
If you do not have a separate bank account, now’s the time to get one. You want to start putting your income and other money in this account before you begin a divorce case. However, don’t take any money out of a joint bank account without discussing this with your lawyer first. Withdrawing funds during a divorce can cause problems in a divorce and may even be prohibited. If you are allowed to take money out of the account, be sure to document it thoroughly.
Avoid Common Mistakes
Divorces are not pleasant, and you may just want to get yours over with as quickly as possible. This is not a good idea. Take the time to get a comprehensive settlement that is thorough and fair. You do not want to leave any money on the table.
Never hide assets. You may want to keep some cash for yourself. You may not want your spouse to get a hold of the computer or other electronics. However, concealing assets is not only immoral but also illegal.
Do not overlook taxes. Selling a home could result in capital gains taxes. Having to pay thousands in taxes could greatly decrease your settlement.
Contact Us Today
Divorces are complex. When there is a lot at stake, you cannot take any chances.
Do not try to settle a high asset divorce on your own. Get experienced legal representation from the team at Tanis McGonegal. We work to create solutions that preserve the value of the asset for you. To schedule a consultation with our office, call (303) 465-4605 or fill out the online form.
