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How to Address Property Division Issues in a High Asset Divorce

 Posted on May 16, 2024 in Division of Assets

Elmhurst, IL divorce lawyerWhile divorce can be a complex, difficult process for anyone, couples who have a high net worth will face additional complexities related to their property, finances, and other aspects of their personal and professional lives. During a high asset divorce, a couple will need to determine how to evaluate and divide substantial and diverse assets. Understanding how to address these issues correctly is crucial, and with the help of an attorney, a person can take steps during divorce to safeguard his or her financial future. 

At Weiss-Kunz & Oliver, LLC, our experienced lawyers provide invaluable legal guidance for spouses with substantial assets who are going through divorce. We work with our clients to evaluate all financial issues that will affect them during the divorce process and after their cases are complete. We advise them on the best ways to resolve disputes they may encounter, and we advocate for solutions that will protect their financial interests and provide them with the resources they need to maintain their lifestyles. Our goal is to resolve divorce-related issues efficiently and effectively while protecting our clients’ rights at all times.

Types of Complex Assets to Address in a High Net Worth Divorce

The division of assets in a high net worth divorce can be complicated due to the nature and variety of assets involved. All of a couple’s marital property will need to be evaluated, and separate property owned by each spouse will also need to be considered, since this may affect the financial resources available to each party. Illinois law requires marital assets to be divided equitably between spouses, providing each party with sufficient resources to meet their ongoing needs.

Some key types of assets that may need to be addressed in a high asset divorce include:

  • Real estate property: In addition to a couple’s primary residence, a couple may also own vacation homes, rental properties, and real estate investments. Determining the value of each of these properties will be essential, and professional appraisals will need to be done. A couple will need to decide whether to sell a property or whether one spouse will be able to maintain sole ownership. For properties where both spouses’ names are on the title and mortgage, a property may need to be refinanced, and one spouse’s will need to be removed as a property owner.

  • Business interests: If one or both parties are business owners, a business valuation will need to be performed. A business that was founded or acquired during the marriage will be considered marital property, but even if one spouse owned a business before getting married, contributions the other spouse made to the business may need to be addressed. A couple will need to make decisions about whether one spouse will buy out the other’s share in a business, whether a business will be sold, or whether they will continue co-ownership of a business.

  • Financial investments: Stocks, bonds, mutual funds, and other investment accounts can be some of a couple’s most valuable assets. However, since the value of these assets can fluctuate, it will be important to ensure that they are evaluated accurately. If investments will be divided between spouses, it will be important to consider the tax implications of these transfers.

  • Executive compensation: When people serve in a high-level position within a company, they may receive multiple forms of compensation in addition to their salary. These may include stock options, bonuses, deferred compensation, and more. Understanding the future value of these assets will be important to ensure that both spouses fully understand how their financial statuses may change as they near retirement. By evaluating income and assets, a couple can ensure that they will be able to divide their marital property fairly and equitably.

  • Intellectual property: One or both spouses may have rights to assets such as patents, copyrights, or trademarks. Ownership of intellectual property can provide ongoing value through licensing agreements or royalties. Determining the present and future financial value of these assets can often be a complex process, but it will be crucial to ensure that marital property can be divided fairly.

  • Retirement accounts and pensions: Spouses may rely on benefits they have earned during their careers to provide for their future financial needs. These assets will need to be evaluated, and they may be divided between spouses by transferring funds or allocating pension benefits. When dividing these assets, Qualified Domestic Relations Orders (QDROs) will typically need to be used to ensure that taxes and penalties will not apply. 

Factors Considered When Dividing Marital Property in a High Asset Divorce

When addressing property division during a divorce, Illinois law details a number of factors that may be considered to ensure an equitable distribution. These factors include:

  • Contributions to the marital estate: These include each spouse's financial contributions as well as contributions to the marriage as a homemaker or actions taken to support the other spouse’s career.

  • Economic circumstances: Each spouse's financial status may be considered, including the non-marital assets they own, the income they currently earn, and their future earning capacity.

  • Duration of the marriage: During a longer marriage, a couple may have acquired extensive assets. Decisions about the division of property should ensure that both parties will be able to maintain their standard of living.

  • Custodial provisions for children: The needs of a couple’s children may be considered. Property may be divided in a way that will ensure that children will be able to live comfortably in each parent’s home. Depending on how parenting time will be divided, it may be preferable for one spouse to continue owning and living in the family home.

  • Debts and liabilities: In addition to dividing marital assets, a couple will also need to determine who will be responsible for paying different debts that have accrued during their marriage.

  • Tax consequences: It will be important to understand how decisions about property division will affect the taxes that each party will be required to pay. 

  • Prenuptial or postnuptial agreements: If a couple had created an agreement detailing how certain assets will be divided during a divorce, the terms of this agreement will usually be followed, as long as the agreement is considered valid and enforceable under Illinois law.

  • Dissipation of assets: If one spouse has wasted marital assets through misuse, such as through gambling or spending money on an affair, these actions may play a role in decisions about how the couple’s remaining property will be divided.

Additional Complexities in High Asset Divorce Cases

During a high net worth divorce, additional challenges may also arise. These issues require careful legal and financial scrutiny. Our attorneys can help determine the best approach to take in cases involving:

  • Hidden assets: One spouse may attempt to conceal certain assets to avoid sharing them during the divorce. Forensic accounting and investigative techniques may be used to discover hidden assets and ensure that all of a couple’s marital property can be divided fairly.

  • Protection of family wealth: High asset divorces often involve significant assets owned by a spouse’s extended family. These assets may include inheritances, trusts, or significant joint investments. A couple may have used a prenuptial agreement to protect family assets, and negotiations during the divorce process may ensure that children or other family members will be able to realize the benefits of family wealth while also providing both spouses with sufficient financial resources.

  • Protection of family businesses or professional practices: Spouses who are business owners may not only need to consider their own financial needs, but they may also be looking to ensure that other family members involved in a business will not be negatively affected by a divorce. Owners of professional practices may also want to ensure that they can continue operating these businesses. Arrangements made in these situations may include a buyout by one spouse of the other spouse’s share of a business or professional practice, or a couple may choose to continue co-owning a business together after their divorce.

  • Trusts and estates: Inherited wealth may sometimes become commingled with marital assets, or couples may need to address various estate planning concerns during their divorce. It will be important to determine whether trusts are considered marital or separate property, and adjustments may need to be made to estate plans to address changes in marital status.

Resolving Disputes Related to Marital Property in a High Asset Divorce

Due to the complexity of the financial issues involved in a high net worth divorce, a nuanced approach to dispute resolution may be required. Issues related to property division may be addressed through a variety of methods, including:

  • Negotiation of a divorce settlement: Negotiation is typically the first step in resolving marital property disputes. Spouses may discuss these issues directly with the assistance of their respective attorneys. They may take steps to reach flexible, private, and customized agreements that can address the unique aspects of their financial situation. Effective negotiation aims to reach a settlement that both parties find satisfactory, thereby avoiding the need for further legal proceedings.

  • Mediation: If direct negotiations prove difficult, spouses may work together with a neutral mediator who can help them discuss and resolve property-related disputes. This method can be particularly effective in a high asset divorce, as it promotes a cooperative environment and can help maintain privacy. The mediator will not make decisions, but rather will assist the parties in finding common ground and reaching agreements on their own terms. Mediation can be less adversarial than court litigation, and it often results in a more amicable settlement, which can be crucial when the parties need to maintain ongoing relationships as business partners or co-parents.

  • Collaborative law: In this form of dispute resolution, spouses and their attorneys will commit to resolving disputes outside of court. The parties may also work with other professionals, such as accountants and financial planners, to ensure that they fully understand the financial issues that will need to be addressed. The team will work together to find solutions that will provide for the specific needs and interests of both parties. Collaborative law focuses on open communication and transparency, and since the parties’ attorneys will be required to withdraw from the case if litigation will be required, it provides an incentive to resolve disputes without the need for further legal action.

  • Litigation: When negotiations, mediation, or collaborative efforts fail, a divorce trial may become necessary. The spouses and their attorneys will present arguments and evidence in court, and a judge will make the final decisions regarding the division of property and other divorce-related issues. While litigation can provide a definitive resolution, it can be more time-consuming, expensive, and stressful. It also places personal and financial matters in the public record, which spouses may want to avoid during a high asset divorce.

Contact Our Elmhurst, IL High Net Worth Divorce Attorneys

During your divorce, decisions about your property and finances can significantly impact your financial future. Given the high stakes involved in these matters, it is essential to have a skilled DuPage County high asset divorce lawyer advocating on your behalf. At Weiss-Kunz & Oliver, LLC, we can provide the legal support and representation you need to resolve financial issues while protecting your interests. To set up a consultation and learn more about how we can assist you, contact us at 312-605-4041.

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