Almost every couple owns assets together, referred to as marital assets in California. But what distinguishes a couple from a typical divorce and a high-asset divorce?
A high-asset divorce is any divorce in which the marital assets are valued at one million dollars or more. High-asset divorces are typically between couples who own their family home, own luxury cars, or have complex assets such as retirement accounts and investments. Because of the high value of assets, high-asset divorces are typically more complex than a normal divorce and can often have an extensive division of assets process that may involve forensic investigators and evaluations of businesses or other assets.
Organizing Your Assets
One of the most stressful aspects of a high-asset divorce is the division of assets. With the high value of your assets, you may worry about getting it right, especially if you may miss out on some of the financial benefits. To help the division of assets process go smoothly, organizing your assets with your attorney is a must-do.
Listing All Assets Acquired
California is a community property state, meaning that all assets acquired during the marriage are owned equally between the couple. To help with the organization of your assets, you should make a list of everything purchased during your marriage. This list may include:
- Your family home and any vacation homes or rental properties
- Your primary vehicle and any other vehicles you or your spouse may have purchased, such as cars, boats, or planes
- Retirement accounts, such as a 401k or Roth IRA
- Your children’s college funds and other financial accounts
- Jewelry owned by either party, including your engagement ring and wedding bands
- The increase in value of an asset owned prior to the marriage (the initial value is considered separate property)
- Any businesses owned
- Stocks and other investments
- Savings accounts or college funds
- Any debt
Provide this list to your attorney and specify exactly what you would like so they know what to expect during your division of property. With this information, your attorney will be prepared to begin the asset division process with the courts and opposing counsel.
You may notice while your assets are being divided that some are missing or misvalued. Sometimes, to hide assets one spouse will claim their parents own their home or claim that a car is a business vehicle. Hiding assets can have severe consequences and is something that should be avoided at all costs.
If you believe there is an error in the evaluation of your assets or you believe an asset is missing, tell your attorney immediately. Together, your attorney can consult forensic accountants or other experts to determine if an asset would be considered community property and is in fact mislabeled.
If assets are missing or mislabeled, a forensic accountant can do a deep dive through all of your financial information to identify the initial purchase or acquisition date of the asset to help identify important information. The work done by the forensic accountant can then be presented to the courts and your assets may be reevaluated or redistributed. If one party is found to be at fault for hiding or purposefully misreporting assets, then the courts may impose penalties on that party.
Effects of a High-Asset Divorce
Effects On Vacation Home
During your high-asset divorce, the distribution of assets may turn out that one party is granted the vacation home, while another party is granted the family home. In other cases, the vacation home may be sold for a monetary value, which could then be split between the divorcing couple. Needless to say, if you wish to leave your divorce with ownership of your family home, you may not be able to also have ownership of your vacation home. Unless you specify that you wish to retain ownership of your vacation home, it will likely not be yours when your divorces finalize.
Effects On Valuable Assets
With everything being split between you and your soon-to-be former spouse, your valuable assets may diminish. What was once an extensive investment portfolio may be a fraction of the size, or a lavish jewelry collection may be much smaller. You should not expect more than half of what you currently own to be yours after your divorce.
Effects On Your Child’s College Fund
If you have funded a 529 savings account for your child’s college education, it will be considered community property and thus divided between spouses. Since divorcing spouses are granted equal value, each parent could be granted 50% of their children’s 529 plans. However, one parent does have the opportunity to be granted the entire 529 plan in exchange for giving up another piece of equally valued community property to safeguard the account for their children.
Bay Area High Asset Divorce Attorneys
Don’t leave your high-asset divorce to just anyone. A high-asset divorce should be treated with extreme care and precision, as it is extremely important to have assets divided correctly and other legal matters to be attended to discreetly.
Do you own more than one million dollars in assets and are considering a divorce? Call the high-asset divorce attorneys at Fenchel Family Law PC at (415) 805-9069 or contact us online to schedule an initial consultation.