The divorce process can be a lengthy and grueling one, especially in high asset divorce cases. This is because there is a lot to consider, including finances and the division assets. To make sure you receive your fair share of assets, you will need an experienced lawyer to represent you.
At Litvak Litvak Mehrtens and Carlton, P.C., we have 65 years of experience in divorce proceedings in Colorado. We know what it takes to protect you, your assets, and your rights. We will work hard to ensure you receive the best possible outcome from your divorce. Call us today at 303-951-4506.
What Is a High Asset Divorce?
A high asset divorce occurs when one or both parties earn a large income and own several expensive items, for example. For that reason, both parties need skillful representation to make sure nothing gets overlooked. If you’re enduring a high asset divorce, you’ll undoubtedly need legal representation with a background in tracing assets for high value divorce cases.
Typical Assets in a High Net Worth Divorce
High asset divorces can include:
Intellectual property such as trademarks, patent, and copyrights
Businesses one or both parties own
Inheritances or trusts
Real estate investments
Stocks, bonds, investments
Vehicles, boats, private planes
Art and jewelry
What Makes a High Asset Divorce Different Than a Traditional Divorce?
In short, more money, more problems. Compared to a traditional divorce, a high asset divorce is more complicated and more demanding due to large income and valuable assets.
The Process of a High Asset Divorce
The first thing one or both parties need to do for a successful high asset divorce is to build a plan. For example, what is your end goal? When determining your end goal for a divorce, be sure to consider:
How will the divorce impact my kids, if I have any at all?
What kind of assets do I want out of the divorce?
How will the divorce change my lifestyle, finances, assets, and where I live?
Do I want to handle the divorce in court or via mediation, negotiation, or arbitration?
Secondly, both parties involved in a high asset divorce need to contact a skilled Denver divorce lawyer at Litvak Litvak Mehrtens and Carlton. One of our lawyers will help you with:
Identifying which assets belong to the couple and which belong to the individual
Dividing up shared interests in businesses
Identifying and valuing assets
Evaluating prenuptial or postnuptial agreements
How Are Assets Divided in a High Asset Divorce?
Because there are more assets up for division, there’s more to gain and more to lose. In Colorado specifically, assets are equitably distributed. This means everything isn’t split 50/50. Instead, it’s based on what the court decides is fair.
In short, only marital property is divided in a high asset divorce. Separate property (inheritance, gifts, or property owned before marriage) is not subject to division. Marital property refers to what was acquired or earned throughout the marriage. Unless there were prenuptial agreements that state otherwise, all is up for division.
What is the Difference Between Separate and Marital Property?
It may not always be easy to determine what is marital property and what is separate property. Even if you obtained the property before marriage, it might not be yours following a divorce. If the property increased in value during your marriage, it may have taken on aspects of marital property. This is where the court decides what gets distributed to each party.
You may think that because you purchased something in your name, it is separate property. However, this is not always the case. If you bought the property during the marriage (even if it’s in your name) it’s up for division.
The same goes for retirement accounts. If the retirement account increases in value over the duration of the marriage, it may be up for division.
Social security is one of the few exceptions in the event that a high asset divorce occurs. The courts are unable to divide this. However, if the spouse is over 62 years old and the marriage lasted for more than 10 years, the other party may still receive benefits. But social security is generally not up for division.
Child Custody and Child Support Arrangements
Parties involved in a high asset divorce must realize that their children are among their most valuable assets. Because of this, determining child custody and child support arrangements can be tricky. Here’s what you need to know before moving forward.
Child Custody Arrangements in a High Asset Divorce
You will have three possible outcomes when making child custody arrangements:
Both parties decide a parenting plan without much argument and court involvement. A mutually agreed arrangement will then be the basis of the court’s custody order.
There is some disagreement initially between parties, but they eventually agree without requiring court involvement. But the court will sign the final agreement.
Both parties can’t agree on child custody arrangements on their own, so the decision goes to a family law judge.
Child Support Arrangements in a High Asset Divorce
When determining how much child support will be given to the custodial parent in a high asset divorce, all streams of income are examined from both parties. These streams of income may include:
Basic income including base salary that’s distributed regularly.
Bonuses and commission. Some wealthy people earn bonuses and commission on top of their base salary. This extra income can be the result of sales and personal or company performance.
Expense accounts and allowances. In a high-asset divorce, several firms issue transportation allowances or spending accounts that are examined.
Passive revenue sources including income from rental properties, stocks, bonds, or interest-bearing accounts. Passive income can undoubtedly boost to overall net worth.
Once a Denver divorce attorney examines all streams of income, they will determine child support with a percentage of the combined gross income from both parents. In Colorado specifically, child support is approximately 20% for one child with 10% for each additional child. When determining child support for high asset divorces, guidelines max out at a combined monthly gross income of $30,000. An electronic worksheet can automatically calculate the child support you must give or receive.
When determining the amount of child support, the court will also consider the quality of life a child may have with either parent. Relevant factors include:
Financial resources of the child
The physical and emotional condition of the child
The child’s educational needs
Financial resources of the custodial parent
Standard of living the child would’ve enjoyed if the parents didn’t decide to divorce
Financial resources and needs of noncustodial parent
Presently in Colorado, a noncustodial parent must pay child support until a child turns 19 or 21 or while the child is still in high school.
What Does the Child Support Order Include?
Child care expenses, health insurance coverage, medical expenses, educational expenses, and travel expenses are included in a child support order in Colorado.
What is Alimony?
A judge will determine if you or your spouse are eligible for alimony, also known as spousal support. Although in high asset divorces, alimony is generally required.
Also in a high asset divorce, it’s sometimes difficult to uncover the entirety of the financial circumstances. In some cases, spouses may hide assets to avoid division and increase their spousal support amount as a result.
A Denver divorce lawyer will uncover any hidden assets to ensure you get a fair distribution. Once all assets have been made known, the judge will determine the need for spousal support. The judge may consider:
Gross income of each party
Age and physical health of each party
Distribution of marital property
Financial resources of each party
Contributions of the spouse
Financial need and lifestyle established by the marriage
The employment status or employment ability of each party
If the judge decides that alimony is appropriate in your case, they determine the amount using a specific formula. Presently the formula is 40% of the higher earning income minus 50% of the lower earning income. The other party may receive alimony payments until they become self-sufficient or they remarry.
What if I Signed a Prenuptial Agreement?
In the event that a prenuptial agreement was previously signed, a high asset divorce will move quicker and smoother. This is because it reduces financial complications for both parties. In fact, many consider prenuptial agreements crucial before entering a high asset marriage.
A prenuptial agreement will lay out how both parties want their assets divided and will disclose finances, including income and debts owed. However if a spouse doesn’t want to receive financial disclosure from the other party, they must sign a form that waives their right to do so before marriage. Prenuptial agreements also protect children’s access to assets if one or both of their parents enter another marriage.
How Can an Attorney Help in a High Asset Divorce?
As has been noted previously, an attorney at Litvak Litvak Mehrtens and Carlton can help you work out every detail of your high asset divorce, especially if a prenuptial agreement wasn’t signed. Our lawyers can help you divide assets, consider tax liabilities in property division, determine child custody and child support, etc.
Contact a High Asset Divorce Attorney in Denver Today