A Level-Headed Approach To High-Asset Divorce
Not every divorce is created equal. As you are considering divorce, it’s important to keep in mind that every divorce will be unique, and that is especially true for high-asset divorces.
At Sowald Sowald Anderson Hawley & Johnson, we frequently represent business owners, doctors, athletes, professors and other divorce clients who may have accumulated a significant amount of assets over the course of their marriage. When there is a large marital estate, one misstep over the course of your divorce can have disastrous consequences for you. That is why we dedicate the time and attention necessary to find sensible solutions that protect your property rights and put you in the best position to start your new chapter.
Safeguard Your Legacy And Your Financial Future
When significant assets such as a family business, stock portfolio, 401(k) or real estate are on the line, you cannot afford to trust a less experienced law firm. Sowald Sowald Anderson Hawley & Johnson has been serving Columbus clients for over 40 years, and is uniquely qualified to handle these complex divorce cases.
While many divorces are contentious, we believe in approaching divorce through strategic and collaborative negotiations to ensure the resulting agreement protects your interests and protects you from conflict in the future. Of course, when negotiations fail, we are always prepared to fight for you in court as well.
If you have not yet entered your marriage or are not ready for divorce, we also offer assistance in drafting prenuptial agreements for our clients. These documents can help keep finances out of your marriage, ensuring everyone’s voices are heard before a conflict begins. Contact our office today to learn more.
What Are the Common Challenges Of High-Asset Divorces?
Dissolving a marriage that involves significant or complex assets has many additional challenges. Some of these can include:
- Valuing a business
- Selling business assets
- Dividing stock options
- Dividing retirement accounts
- Uncovering hidden or dissipated assets
- Assuming the mortgage of a piece of real property
- Dividing a business in a divorce
These are just a few of the many issues that can arise. It is critical to work with an attorney who can also proactively anticipate other challenges that you might face. We can help you with any and all issues that could complicate your divorce, always striving to protect your share of marital assets.
How is a family business divided in divorce?
Running a family business is time-consuming and stressful. Your family restaurant or landscaping business may have survived some lean times when you first launched it and during economic downturns. You may have worked long hours to help it succeed. Now, you are facing a divorce and are worried: How will your divorce impact your family business?
In Ohio, marital assets are split between divorcing spouses in a fair, equitable manner. If you founded your business after your marriage, you likely will split some of its assets in your divorce. If you started your business before marriage, but you and your wife both have worked to help it succeed and used joint money to help it grow, your wife likely will receive some of the business assets.
How much your spouse receives of your family business assets will depend on many factors:
- How long you have been married
- How much your spouse contributed to the business (did your wife work for the business too?)
- If you paid yourself a standard wage while running your business (if you didn’t, your wife could argue that your family suffered and she should receive more of your assets in divorce)
Your business assets may be separate property if you established your business with money of your own, before you married, and your spouse signed a prenuptial agreement protecting your business assets in case of divorce.
How to split assets of a family business
When couples divorce and split assets of a family business, they usually approach that in one of these three ways:
- One spouse buys the other out of their share of the divided business assets.
- The divorcing spouses decide to continue to co-own the business together.
- The divorcing spouses decide to sell the business and split the profits.
If a divorcing couple decides to sell the family business, or one spouse wants to buy out the other, they will need to have a business valuation completed. The business valuation will determine what the business is worth. Then, if one spouse buys the other out, they will have to either secure a loan to buy out the other spouse or give the other spouse a greater share of other marital assets (maybe the family home and more in retirement savings).
If you own a family business and are facing divorce, you should consult with our experienced divorce attorneys. Our high asset divorce attorneys can help determine what your marital assets are and how much of your family business’ assets your spouse could receive in a divorce.
5 Most Common Mistakes You Can Make In a High-Asset Divorce
Divorce is difficult, both emotionally and financially. Figuring out how to disentangle yourself from your spouse is complicated.
Especially in a high-asset divorce, there is much to gain or lose. The consequences of making the following five mistakes could cost you greatly.
1. Getting it over with
It is understandable that you feel desperate to leave your situation, but hasty decision-making can leave you with much less than you deserve at the end of your marriage.
2. Seeking revenge
Hurt feelings are normal when a union falls apart, but you should address emotions with a therapist, not a judge. Attempting to disrupt or control proceedings as a form of retribution is not the ideal strategy, and the court will recognize vindictive behavior.
3. Hiding assets
Ohio division of property law requires parties to disclose all assets for equitable distribution. Attempting to conceal property to keep it from your spouse can severely jeopardize your case.
4. Disregarding the impact of taxes
You may desire an even split, but to avoid a potentially large financial drain on your resources, you should consider whether you can afford the tax liability that comes with specific assets and investments.
5. Skipping mediation
When your case must go to trial, the process is lengthy and the final decision is out of your hands. Reaching an agreement during a conference with a skilled mediator is the quickest way to end your marriage with a fair settlement.
Throughout the divorce process, it is essential to understand the complexities of property division in order to protect yourself and your entitlements.
The Tax Implications Of High-Asset Divorce
Taxes become immensely complicated in any divorce, especially one involving high assets. The sale of real estate often requires you to pay a capital gains tax. Effective as of January 1, 2019, spousal support is not deductible by the payor for tax purposes, nor is it taxable for the recipient. When considering your financial settlement, you should look at the long-term tax implications as well.
Why Handle High-Asset Divorces Differently From Other Divorces?
All divorces require special attention, but high-asset divorces involve significantly more assets at stake. Often, one spouse has more financial literacy or handles the finances more than the other, putting the dependent spouse in a very vulnerable place if the assets are not valued and accounted for correctly. If you do not have an assertive attorney who is experienced in these matters, you stand to lose your financial security for a long time.
A Steady Hand Through Your Divorce Case
When you are entering a divorce with significant assets, it is important to choose a law firm you can trust. At Sowald Sowald Anderson Hawley & Johnson, we work closely with each of our clients, as well as a team of experts who can help value your assets and provide insight that could prove invaluable in your case. Schedule a consultation with our high asset divorce attorneys today by calling 380-217-3322, or reach out online to get started.