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Filing for a high-asset divorce can be complicated. In California, couples with $1 million or more in assets are considered to have high net worth; for them, the process of filing for a divorce will be much different than couples with fewer assets. If you’re pursuing a high-asset divorce, here's what you should expect.
Filing for Divorce
While filing the necessary documents for a high-asset divorce with the court is similar to a traditional divorce with fewer assets, it often becomes complicated once the couple begins to make agreements regarding their children, property, and any support they might need to pay.
Valuation of Assets
One of the most important things you should prepare for in filing for a high-asset divorce is understanding the value of your assets. This includes tangible items such as homes, cars, and jewelry, as well as intangible items such as stocks and bonds. It's also essential to consider any retirement accounts or pension plans, inheritances, business interests, and investments. All of these must be accurately valued to ensure that the division of assets is fair to both parties.
With some assets, such as businesses, a professional valuation might need to be done before you file for divorce. This can help assist your divorce attorney and the court during the division of assets process, where the business will categorized as either marital or separate property.
Property Division
Once all of your assets have been accurately valued, they must be divided between the two parties. This can be done through negotiation, mediation, or litigation, which results in the court deciding the outcome. In California, property is divided equitably (not necessarily equally) between the divorcing couple based on factors such as each party's financial situation, their age and health condition at the time of filing for divorce, and how long they were married.
If an agreement cannot be reached through negotiation or mediation, you will need to move to litigation to resolve their property division matters. This makes it especially important to choose a family law firm with extensive experience in litigation and seeking the best possible outcome for its clients.
Hidden Assets
With the high value of assets involved in the divorce, one party might try to "hide" assets to avoid property division. If hidden assets are suspected, your divorce attorney might consult a forensic accountant to review your financial statements and try and uncover the hidden assets.
Tax Considerations
It's important to consider potential tax implications when dealing with high-asset divorces in California. For example, if one spouse transfers ownership of certain assets to the other spouse during the divorce (such as stocks or businesses), this could result in significant tax consequences. In addition, both parents must file their taxes separately following the divorce, and only one parent can claim their children. It's important to speak with an experienced attorney about these matters so you fully understand potential tax implications before making any decisions regarding asset division or other aspects of your divorce.
Child Custody & Support
If you share children with your spouse, you will also need to build a custody and support plan for your children during your divorce. In California, both parents are responsible for financially providing for the children, so child support will most likely be ordered at the time of creating a custody order.
One of the biggest complications when building a custody arrangement in the child's best interests is how the child's lifestyle will be maintained after the divorce. This often includes keeping your children in the same schools and extracurricular activities and ensuring their needs are met.
Talk to Experienced High-Asset Divorce Attorneys
Going through a high-asset divorce can be emotionally draining, but it doesn't have to be overwhelming if you know what steps need to take place ahead of time—from valuing all your assets to understanding potential tax implications. With an experienced high-asset divorce attorney by your side, you can be sure that your best interests are advocated for as you seek a positive outcome.
Are you considering going through a high-asset divorce? Schedule a consultation with one of our attorneys today by calling our firm at (626) 340-0955.