My Spouse and I Have a High Net Worth. How Will a Court Divide Our Valuable Property in a Divorce?
By Space Coast Daily // September 21, 2021
Going through a divorce is a very challenging and stressful experience for anyone. One part of the divorce process that can be quite complicated is figuring out how to split up the couple’s assets. This can be made even more complicated when the couple has a high net worth and significant assets.
Those that do have a high net worth should do their best to understand what process the court will take to divide the property. There are several factors in particular that can influence how your assets are split. A divorce can be a lengthy process, which is why you should take the time to consult with a reliable lawyer and learn more about these things stated below.
What Assets Will be Split?
When you are going through a divorce, it is always important to understand the assets that can be split during a divorce. In general, basically any asset owned by either spouse could be subject to being split. Some of the most common assets that are split include real estate, cash and bank accounts, stocks, vehicles, and other investments.
How are Assets Split
In the state of Colorado, the court system tends to split assets equitably. There are various factors that will be considered when the court is trying to develop a fair asset split plan. Some of the most common factors that are considered include the following:
Assets Brought into Marriage
One of the largest factors that will be considered when deciding how assets will be split is which partner brought the assets into the marriage to begin with. When it comes to high-net-worth couples, it is very common for one or both of the partners to have brought in considerable assets including real estate, stocks, cash, and other investments.
In these situations, the court will typically try to return as many of the assets to the contributor as possible. However, they could decide to split some assets based on a range of factors including the length of the marriage, childcare needs, and other factors.
Assets Inherited During Marriage
Another factor that will be taken into consideration is the assets that were inherited by either party during the marriage. In general, assets that were inherited throughout the course of the marriage will be kept by the individual that inherited them.
If they inherited cash, stock, or other assets that were liquidated or co-mingled with other assets during the marriage, figuring out the right way to split the assets can be more complicated. However, the contribution will always be taken into consideration during this process.
One of the most significant factors that will go into the court’s decision is whether you had a prenuptial agreement in place or not. A prenuptial agreement is a contract between both parties that will determine how assets will be split if a divorce was to occur.
These agreements will normally include a variety of scenarios that can determine what assets are based on a variety of variables. In a lot of cases, these agreements will not include assets that are accumulated during the marriage.
Equitable Division of Assets
Outside of assets that were brought into the marriage or inherited, there will typically be an equitable division of the assets between the different parties. This part of the process focuses on making sure that there is a fair, but not necessarily equal split, of the assets. Some of the most important factors that go into this include the following:
■ Contribution of Each Spouse – The court system will take into consideration how much each spouse contributed towards the acquisition and development of assets. This can include income earned throughout the marriage as well as the value that comes with being a stay-at-home parent or homemaker throughout the marriage.
■ Value of Assets – A big part of the process will also be to come up with a fair value of core asset. Some assets that can be harder to value include homes, vehicles, and other big-ticket items. If the two sides cannot come to a fair value of these assets, a separate appraisal may need to be ordered to confirm the value. Any mortgages, auto loans, or other debt tied directly to these assets will be taken into consideration when assets are split.
■ Other Circumstances – The court system will also factor in other items into the overall consideration, which can include ensuring that any children involved will continue to have a home to stay in with the primary caregiver following the divorce.
Throughout this process, the ultimate goal will be for the court system to come up with a fair way to split assets. This should provide both parties with a reasonable split of what was built together throughout the marriage.
How are Debts Handled?
While it is important that there is a clear and concise division of assets in a divorce, there also has to be a consideration for how debts are divided. Debts that are secured by properties, vehicles, or other assets will typically be retained by the party that gets to keep the underlying assets.
Debts that were brought into the marriage by one party will typically belong to the individual that held the debt prior to the marriage. Other debts that are accumulated throughout the marriage are typically considered the responsibility of both parties, and they will be split equitably. Normally this will be done in a fashion that is prorated along with the marriage assets.
If you are going through a divorce, it is natural to be concerned about how your assets are going to be split. As you will want to receive as positive of an income as possible, hiring an attorney experienced in complex financial divorces is very helpful.
For those that are in Colorado, the Cossitt Law Firm is a great group to contact for your divorce attorney needs. Your attorney can provide you with a variety of legal services during the divorce process that will aim to ensure your rights are properly represented and that you receive a fair outcome.