Proven Bellevue High Asset Attorney

Divorce can be challenging for anyone, regardless of income or assets, but the situation can become complex quickly when there’s a lot at stake. High-asset divorces can take time and involve long and arduous negotiations. Additionally, many special considerations can come into play, especially when children are involved.

From a legal perspective, high-asset divorces often involve complex property division, alimony, and child support issues. From a financial perspective, the division of assets can have significant tax implications. 

Here’s what you should know if you’re involved in a divorce situation when many assets are at stake.

Common Factors in High-Asset Divorce

A High-asset divorce is more likely to involve:

• Business interests. Significant wealth usually involves whole or partial business ownership, such as a tech company or professional practice. If both spouses have an ownership interest in a business, they will have to decide whether the business will be dissolved, whether one partner will be issued a buyout, or whether they will both continue their business roles after divorce. A valuation expert can determine not only how much the business is worth today but also how much it will provide the owner in the future.
   
• Marital property disputes. Washington state divorces are governed by community property laws, meaning spouses have shared ownership in any property accumulated during the marriage. However, money and property acquired before marriage that is kept separate from community funds may be the sole property of one spouse. In a high-asset divorce, determining whether an asset is a marital property or not can affect a spouse’s settlement by millions of dollars. An attorney can help trace accounts, property, jewelry, safe deposit boxes, and other assets back to their origin to determine the character of the property.
• Hidden assets. Spouses may “forget” to list important assets or retitle property in a relative’s name in an attempt to deprive their partners of their fair share. If you suspect your partner is hiding assets (or if your partner controls the finances), you may need a forensic accountant to determine the extent of shared property, examine previous transactions, and accurately determine each party’s financial holdings.
   
• Tax problems. Wealthy spouses are more likely to suffer large tax consequences when going through a divorce. When dividing assets in divorce, it's important to look beyond the future values and consider the tax benefits and consequences of each one. While you can transfer assets to a spouse tax-free during divorce, the future tax burden will be yours alone once you accept ownership.
   
• Overseas investments. High-asset divorces may involve assets or investments located in another state or even another country. The division of offshore accounts or foreign investments requires knowledge of international laws, debt distribution, and tax implications on alternative property.
   
• High spousal support. Some high-income marriages involve one working spouse and one stay-at-home spouse who raises the children. If one spouse hasn’t worked outside the home for several years, a vocational expert may be necessary to determine the spouse’s earning capacity after the separation. This is vital for securing adequate spousal support to keep their lifestyle similar to what it was during the marriage.
   
• Child support considerations. To ensure children of high earners are not left destitute by their parent’s divorce, wealthy spouses may be ordered to provide a higher amount of child support than usual. Parents could potentially be ordered to cover significant costs of their child(ren)’s future, such as school fees, private tutoring, or college tuition.
   
• Expert witnesses. The court may rely on experts to determine the best way to divide complicated properties. Witnesses may be called to appraise valuable art or antiques, forecast future real estate values, and estimate the fair market value of tangible and intangible property at the time of the separation.
   
• Privacy concerns. High-profile divorces are more likely to be publicized or speculated on in the press. An attorney can help spouses minimize public exposure and keep the divorce as private as possible.

The Biggest Mistakes People Make in a High-Asset Divorce

Here are a few of the most common mistakes that people with a high net worth often make in a divorce and how to avoid them:

1. Poor recordkeeping or accounting. As part of your divorce, you’ll be required to create an inventory of all your assets and debts. As Washington is a community property state, your partner will have an equal interest in any assets or property gained while you were married, so properly accounting for everything is vitally important. This will ensure you’re not giving away more than you should or not getting your fair share in the divorce settlement.
2. Intentionally hiding assets. If you know you have an asset but don’t list it on your financial disclosure forms, you may be opening yourself up to severe penalties during your divorce. Attempts to hide assets will almost always be discovered by diligent legal and investigative work by your partner’s attorneys. It can result in large fines and heavy sanctions against you in court, and your spouse may be awarded a larger share of the marital property as punishment for your misconduct. It also costs you creditability in the eyes of the court and can even result in criminal charges. Do not try to hide assets during the divorce.
3. Failure to investigate assets. Along similar lines, don’t forget to investigate the assets your partner is claiming to be sure they’re true and accurate, and be sure your spouse isn’t trying to hide assets from you. There are also cases where you may not have been aware of a particular asset or income stream that you’re entitled to a portion of. Your attorney can help you with this investigation and may connect you with a forensic accountant, appraiser, or other professional who can assist in finding and evaluating assets.
4. Acting purely on emotions. There’s no denying that divorce has an emotional component, and it’s easy to fall into the trap of relying solely on your emotions to guide your divorce. While it may be important for you to acknowledge your feelings and work through them in a way that you find healthy, it’s also important not to let your feelings take control of your decisions. You may end up with a lot less than your fair share if you don’t think things through. You also may get penalized or even face criminal charges if anger or another negative emotion guides your behavior.
5. Ignoring the tax consequences of divorce. Your tax situation can change significantly after the divorce. You may end up owing taxes due to asset transfers, alimony payments, or capital gains, so you may want to consult with an accountant or financial planner during the divorce process.

Get Legal Help for a High-Asset Divorce

High-net-worth individuals have a lot at stake when it comes to divorce, and it’s critical to have experienced legal representation on your side. Your high-asset divorce attorney will be able to help you sort through the marital assets and debts, negotiate a parenting plan, and ensure that prenuptial or separation agreements are followed. An attorney will not only have the experience and expertise you need but also know other professionals who can help you succeed in this new phase of your life.

If you have any questions about your divorce situation, the Law Offices of Molly B. Kenny is here to help. Call us at (425) 460-0550, or use the contact form to send an email and arrange a private consultation with an attorney in our Bellevue office today.