How to Divide Complex Properties in a High Asset Divorce
If you are going through a high asset divorce, it is important to understand the unique challenges that come with dividing more than just basic property. When a divorce involves significant wealth, dividing assets is more involved than simply splitting things down the middle.
Why Accurate Property Valuation Matters
You may think of your property in terms of current market value, but there is more to consider. For example, a business might appear valuable on paper but could be facing legal or financial trouble. Stock values change quickly. Real estate investments might carry a large mortgage that reduces its actual worth. Even bonds and private investments require review of repayment terms, interest rates, and risk. To divide property fairly, you need more than estimates of values. You need an accurate valuation of each asset and the risks related to the asset to know what you are really dealing with.
Understanding Tax Impact and Basis
Not all assets with equal market value will have the same financial consequences later. If you sell an investment, your taxable gain is based on what you paid for it originally, which is called the basis. A low basis can mean a larger tax bill down the road. This is especially important when dividing investments or real estate, where future tax obligations could make one asset far less valuable than it appears today.
Different Levels of Risk and Return
Fair division is not only about balancing asset values on paper. Some assets carry more risk than others, and each spouse may have different comfort levels when it comes to long-term outcomes. One may prefer steady, lower-risk investments, while the other may be more open to holding assets that could gain or lose value over time. Real estate with debt, private partnerships, and speculative business interests can be difficult to divide fairly and may come with financial consequences that are not obvious at first glance. Some stocks are riskier than others, which affects the value of the stock.
These choices can impact your taxes, your ability to access cash, and your overall financial stability. You should understand your risk tolerance level. Taking time to understand what is involved and making decisions based on clear information will lead to better outcomes for both parties.
Expert Advice Can Make a Difference
Attorneys who regularly handle high asset divorce cases often bring in outside professionals. Business appraisers, forensic accountants, and investment advisors can help uncover financial details that may otherwise be overlooked. They can also explain the details of a particular asset or liability so you can intelligently negotiate a settlement with your spouse. In a court case, each side might use their own experts to support their position, which can double the cost of that part of your divorce.
If you are using a more cooperative process such as Collaborative Divorce or Mediation, a neutral expert can work with both spouses and provide the same information to everyone involved. These professionals can help you understand both the present value of your assets, the risk involved and how the asset may impact your financial picture in the years ahead.
Work with an Attorney Who Understands Financial Tradeoffs
At the Law Offices of Robert J. Merlin, we work with clients who need thoughtful strategies to divide assets in high net worth divorces. We will take the time to understand your goals and help you make decisions that reflect your priorities. Contact Robert J. Merlin at (305) 448-1555 to schedule a consultation and to learn how we can help you move forward with a clear plan in place.
The Law Offices of Robert J. Merlin, P.A. are located at 250 Catalonia Avenue, Suite 706, Coral Gables, FL 33134.
Bob Merlin is a Florida Bar Board Certified Family Law Specialist, he practices in the areas of divorce, time-sharing of children and parenting plans, child support, alimony, paternity, pre-nuptial and post-nuptial agreements, and cohabitation/partnership agreements.
As an experienced Collaborative attorney, Bob continually hones his skills in the Collaborative Process and trains other professionals how to become a Collaborative professional as he is.
“My goal is to help divorcing and other family law clients make well-informed decisions so they experience a more efficient process and feel more in control over their futures.”
