When you're going through a divorce, there are a number of steps you need to complete. One of the most important is the division of financial assets. When you have a high net worth, this process can be even more complex and time-consuming. Here are some of the issues you may need a lawyer at Friedman & Friedman to help you with.
Retirement Accounts
Retirement accounts are part of the equitable division of assets but aren't as easy as dividing other cash assets. One reason is taxes. Some retirement accounts may be tax-sheltered and others may not be. This means a dollar in one account may not be equal to a dollar in another account since the amount of taxes would be different. When dividing retirement accounts, you need to account for that difference in taxes.
The other reason is that you may need to buy or sell investments to be able to make the transfers you need to. This brings in more questions of possible taxes as well as how to time the sale for the best price and what day's value you should use in your divorce agreement.
Business Shares
Business shares can be more difficult to divide than retirement assets. If you have to sell, you need to consider taxes as well as how much the business is worth. Unlike stocks, it can be much harder to sell a small business, and this could affect the value.
Further, you need to decide who will run the business. If two spouses are divorcing, they may not be able to continue as business partners. The best course of action may be to buy one spouse out with a larger share of other marital assets. If you do decide to continue as joint owners or partners, you'll want to make sure you have a strong business operating agreement in place so any lingering issues from the divorce don't impact the business.
Real Estate
Real estate is often a touchy subject because, in addition to the monetary value, most people have a sense of attachment to their home or vacation home. You may want the home for personal reasons and don't feel that half of its value is worth losing it.
When children are involved, the judge may decide who gets the home for you based on who gets primary custody so the children's lives aren't disrupted. Otherwise, you will usually need to come to some sort of agreement. This may include one spouse giving up additional money or some other asset the other spouse wants more than the home. This should all be discussed as part of your total divorce settlement.
Alimony
One final point of contention is alimony. Alimony provides compensation to a spouse who may have given up work opportunities to help take care of the home or further the other spouse's career.
Alimony is often part of divorce settlements when the spouses had unequal incomes. It may be temporary or permanent based on how the receiving spouse's earning potential and the length of the marriage. You may be able to include additional assets in the settlement instead of paying alimony.
Do you have a high net worth and are thinking about filing for divorce? Call (914) 873-4410 to talk to a lawyer at Friedman & Friedman today.