Couples facing divorce who have significant assets are faced with a unique set of challenges. High earners or those who have been married for a long time and have accumulated significant assets must by agreement or litigation divide their financial matters in a high asset divorce. There are three general issues that bear consideration in this context. These are: Property Division, Spousal Maintenance, and Child Support.
The high asset divorce attorneys at The Gasper Law Group understand your unique needs and can provide the legal guidance necessary to achieve your goals. Our team is skilled in many aspects of domestic relations law and can help you navigate the complicated legal landscape.
Prenuptial Agreements in High Asset Divorce
A prenuptial agreement can address numerous aspects of high asset divorce ahead of time, such as property division, spousal maintenance, and debt. However, prenuptial agreements cannot affect child support or visitation, called parenting time in Colorado.
It is in any divorcing couple’s best interest when a prenuptial agreement is involved to obtain the services of an experienced divorce attorney. Although a prenup sets the groundwork, an attorney can work towards ensuring your interests are addressed throughout the case.
Property Division in Colorado
In many high asset divorce cases there are types of assets not typically found in other cases. some examples are:
- Business Interests
- Stocks, Bonds, or Investment Portfolios
- Deferred Compensation Entitlements
- Performance-Related Bonus Payments
In the case of business ownership or partnership, it is very important that your attorney get a qualified forensic accountant on board early in the case to make sure this important part of your case is handled properly. In many high asset cases, the business is the most valuable asset the parties have. Decisions as to how it will be divided are complex and have long-reaching consequences. For instance, if the assets being considered have delayed compensation—meaning they would not vest until after certain conditions are met—it is possible that those assets would not be divided up if they were not fully vested during the marriage. Many factors must be considered when high-value assets are on the line.
Before dividing property, the court must first determine what property is the separate property of one of the parties and what property is marital. There is a presumption under Colorado law that all property acquired during the marriage is marital property. There are two exceptions to this rule:
- Assets acquired by gift or;
- Inheritance are presumed to be the separate property of the recipient.
Proving property was a gift or inheritance can depend on what asset is being reviewed. For instance, the property could be an investment account set aside from a relative in only one spouse’s name, or it could be money or land provided as a gift when the couple purchased or built a home. In either case, the spouse must prove the property had been kept separate.
Once the court has determined what property is the separate property of each spouse and what property is marital, the next step is to divide the marital property. The law requires an equitable division of the property, and equitable does not always mean equal.
One thing to note is that although the property may be divided equitably, any increase on the value of that property will be considered marital property and subject to division between the spouses. For instance, the interest accrued in an investment account during the marriage would be divided between the two parties although one of them would keep the account.
In a high asset divorce it is critical that your attorney secures reliable and complete financial information and then works with you to ensure a good result. Consult with an attorney at The Gasper Law Group today to determine the steps you must take in order for provide all the necessary information to move your high asset divorce case forward.
Hidden Assets in High Asset Divorce
Although most people usually operate in good faith when getting divorced and provide all financial information during the proceedings, there is always the possibility one of the spouses could be using the business to hide assets before the divorce. This might be done for a number of reasons, such as having less property to divide or to having fewer personal expenses accounted for in their records.
When determining property to be evaluated in a high asset divorce, your attorney will likely involve a forensic accountant in your case in order to find any missing assets. Although they can provide the investigatory skills needed to find the money, a forensic accountant reduces the total cost and, unlike an attorney representing someone in a divorce, can testify on their behalf. If you suspect your ex-spouse is using a business or other means to hide assets in divorce, contact an attorney right away.
Qualified Domestic Relations Orders (QDROs) in Colorado Divorce
Attorneys in Colorado handling divorce cases can utilize a Qualified Domestic Relations Order (QDRO) as required by the U.S. Internal Revenue Service (IRS) in order to transfer jointly shared accounts from one type of account to another without risking the asset be taxed out. If you and your spouse share retirement funds, mutual fund accounts, or other types of investments you need to divide up, your attorney will likely involve a QDRO in order to minimize the impact on your long-term investment plans.
Colorado law provides a formula for calculating spousal maintenance (previously called alimony). This formula is applicable to couples whose total annual combined income is under $244,000.00. In high asset cases this usually means that the amount is up for either agreement or order of the Court. The Court can consider any relevant information in making its decision on the amount and duration of spousal maintenance.
If you and your spouse earn over $244,000.00 per year combined, the question of spousal maintenance becomes more complex. It is crucial that you have an attorney experienced with this issue to ensure a good result for you.
Child Support in High Asset Divorce
Colorado law provides a computation for child support, much like spousal maintenance discussed above. The same principle applies—that being in most high asset cases, the parties’ combined income exceeds the computation and therefore the issue is up for agreement or court order. In addition, children involved in the divorce are entitled to a standard of living approaching what they would have had if their parents had remained married. There may be private school costs, activities, family vacations, and other substantial expenses for the children.
The Judge hearing your case has wide discretion to order the division of the children’s expenses between the parties. In a high asset case, the Judge will likely order child support along with other orders relating to the payment of certain expenses. Typically, private school education is divided between the parties if the children have previously attended private school.
The Judge can order the expenses divided equally, proportionate to each party’s percentage of total income, or in some other manner. Because of the complexity of the issues presented in high asset cases, it is important that you have an attorney experienced in handling these issues.
One of the experienced family law attorneys at Gasper Law Group will be glad to meet with you to discuss the specifics of your case. Contact us today to schedule a consultation.