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Elmhurst, IL high net worth divorce attorney for business valuation and hidden assetsThe divorce process can be complicated regardless of a couple’s circumstances. Spouses may be involved in contentious disputes related to any or all of the issues that will need to be resolved before they can legally dissolve their marriage. Even if a couple agrees on most of the issues in their divorce and plans to avoid conflict wherever possible, they may still encounter difficulties related to their property, incomes, and finances. This is especially true in high net worth divorce cases where spouses own valuable assets or earn high incomes. In these cases, spouses will need to address a variety of unique financial concerns. It is crucial for spouses to secure representation by an attorney who is experienced in high asset divorce cases, and with the right lawyer on their side, they can make sure their legal and financial concerns will be addressed correctly.

Property Division Issues

All divorcing couples will need to decide how they will divide their marital property, which consists of all assets and debts they acquired during their marriage. This can be an especially complex process for couples who have a high net worth, since they are likely to own a wide variety of different types of physical property and financial assets. These may include:

  • Real estate - In addition to their marital home, a couple may own vacation homes or other real estate property. These properties should be appraised to determine their value and the amount of equity the spouses own in each property. It may not be possible to equally divide these properties between the spouses, so it may be necessary to sell certain properties during divorce.

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Illinois divorce attorney, Illinois family lawyer, IL child custody lawyerDivorce is a long and demanding process, but can get even more complex for high net worth couples. Unlike traditional divorces, high net worth couples must resolve issues dealing with complex taxation, support obligations, tracing of assets including offshore and international accounts, and valuation of businesses and other properties.

The following factors will help you prepare for what you might experience within your high net worth divorce:

1.    More assets, more to divide. Prior to your divorce, it is important to gather all tax (tax returns, W-9’s, I-9’s), financial, and property/asset documentation regardless of your knowledge on the subject. Documents tend to get lost after the divorce has already been filed, making this process more difficult and could put you at a disadvantage in divorce negotiations.

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Illinois divorce attorney, Illinois family lawyer, IL legal separation lawyerIllinois is an equitable distribution state, meaning that when you get a divorce, not everything you and your spouse acquired, such as property and assets, will be divided equally.

If you and your spouse cannot come to an agreement on how to divide your property and assets and decide to take your divorce to court, the judge will consider certain marital circumstances on how to divide your property, such as:

However, if your spouse is hiding assets from you in hopes they will not have to split it with you, things can get even more complicated.

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hidden-assetsDuring divorce, both spouses have a right to equitable division of marital property. While this does not necessarily mean that everything will be split 50/50, each spouse is entitled to a fair and equitable portion of the assets that the couple own. However, divorcing spouses often try to hide assets from each other in hopes that they will not have to share monetary funds or other property with their spouse. This is especially common in cases of high net worth divorce.

If you suspect that your spouse may be concealing any money or property, you should look in the following places to find out whether there are any hidden assets:

  1. Tax returns - You should obtain a complete copy of your joint tax return, which can help you get a full picture of your spouse’s income, any interest or dividends they earned, and the deductions they have taken. In some cases, a spouse may over-pay the taxes they owe, allowing them to receive a larger tax return after the divorce has been finalized.
  2. Bank accounts - Be sure to review the complete statements for any joint bank accounts. Look for transfers to the accounts of friends or family members, or to accounts that have been created in children’s names.
  3. Business expenses - Spouses who own a business often use them to hide assets. They may pay a salary to a nonexistent employee or delay signing contracts or charging clients for services until after the divorce. Be sure to review business bank statements and income and expense reports to look for any discrepancies.
  4. New purchases - Spouses often use marital funds to purchase physical assets such as artwork or collectibles and then under-report the value of these items when dividing marital property. Look for any recent purchases that your spouse has made, including antiques, furniture, or jewelry.
  5. Fake debt and purchases - A spouse may claim that they owe money to a friend or family member or make payments to other people for nonexistent products or services. Then, after the divorce has been finalized, these people will transfer the money back to your spouse. Be on the lookout for any suspicious payments or loans.

Contact a Lincolnwood Divorce Lawyer

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taxes and high asset divorce, Elmhurst divorce lawyersAlthough all divorces are bound by the same laws under the Illinois Marriage and Dissolution of Marriage Act (IMDMA), those with a high net worth divorce often experience an added layer of complexity. This can be especially true in regards to tax implications, which can financially wipe out both parties if they are not careful. Learn what you need to know about tax implications in your high asset divorce and how you can protect yourself in the months to come.

Financial Support: Alimony vs. Child Support

Oftentimes, high asset divorces result in an alimony (or spousal maintenance) payment for lesser-earning or earning-impaired spouses. Those with children may also receive child support payments. Both are forms of financial support, but each works differently under tax laws. Whereas child support is not taxed or taxable, alimony payments are the opposite. It is important that you understand these differences and how they may impact your finances.

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