Tag Archive for: high-asset divorce

Navigating the Division of Rare and Valuable Collectibles in High Asset Divorces

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Divorce is undoubtedly one of the hardest things you’ll go through, and when valuable assets are involved, it can become even more complex. One of the key aspects of a divorce settlement is the division of assets, including any rare and valuable collectibles that you and your spouse may have accumulated over the years.

Unfortunately, this process can get sticky quickly, especially if both parties have a meaningful connection to the assets in question. We can help. Call Pence Law Firm at 304-345-7250 to set up a time to meet with our Charleston divorce team.

The General Approach to the Division of Assets

In a divorce, splitting up what you own with your spouse is a big part of the process, and it’s all about being fair to both sides. This isn’t just about who gets the house or the savings account. Antiques and collectibles are considered assets too. The goal here is to make sure everything is split in a way that’s even and right, taking into account what each person has put into the marriage. That doesn’t just mean what each party has contributed financially to the marriage; it also refers to non-financial contributions.

Valuing Your Collectibles

Figuring out how much your rare and valuable collectibles are worth is a critical step in making sure they’re divided fairly when you’re going through a divorce. The worth of these items isn’t always clear-cut because it can change based on how much people want them, their condition, and their history or background. 

To get a true sense of what your collectibles are worth, it’s smart to bring in experts like appraisers. These professionals have the skills and knowledge to give you a reliable estimate of your items’ value. This is generally harder and more time-consuming than valuing something like a home, vehicle, or retirement account, which are considered fairly standard assets. Be prepared to bring in an appraiser with expertise in your type of collection.

Negotiating the Division of Collectibles

When it’s time to talk about who gets what from your collection of rare and valuable items, keeping a cool head is crucial. This stage can stir up strong feelings, especially if both you and your spouse cherish the same pieces. Going into these talks ready to find a middle ground can make a big difference.

Start by listing all the collectibles and their estimated values, which you’ve already figured out with the help of experts. This list will be your guide. Then, discuss each item openly, considering both your emotional attachments and their financial worth. It might help to decide on some trade-offs, especially if one party is more connected to the collectibles than the other.

If one party doesn’t want to keep the collectibles at all, you may be able to negotiate a situation in which other assets are used to offset the value of the collectibles.

Factors That May Complicate the Division of Your Collection

Splitting up a collection of rare and valuable items during a divorce isn’t always straightforward. For example, what happens if the collection is worth more intact than it is split apart? This isn’t always the case and depends entirely on the specifics of your collection and what collectors value. But if your collection will take a hit by being split up, it may make more sense to fight to keep it intact.

You may also face wildly different valuations, especially if both parties bring in their own appraisers. When this happens, it can be hard to figure out where the truth lies. You may choose a number in the middle of the two, bring in a third appraiser with more expertise and educational background, or look for reasons to explain the discrepancies in the proposed values.

Regardless, having an experienced divorce attorney is crucial throughout this process. Look for one with experience in high-asset divorces, including those with unique collectibles and antiques.

Prepare for Divorce with Pence Law Firm

At Pence Law Firm, our Charleston family law team is committed to helping clients like you prepare for a fresh start after divorce. Take the first step now by contacting us online or calling us at 304-345-7250 to set up a consultation.

Navigating the Emotional and Financial Challenges of a High-Asset Divorce

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People often assume that having more money makes every aspect of life easier. While it can definitely take the edge off of certain problems, it can become a significant liability during divorce. High-asset divorces tend to be much more time-consuming than standard divorces, simply because there is so much to fight over and divide fairly. As you prepare for your divorce, it’s crucial to know what to expect and understand your options.

Ready to start your Charleston divorce case? Call Pence Law Firm at 304-345-7250 to set up a consultation with our team right away.

The Importance of a Comprehensive Financial Assessment

Before you can make any real plans or decisions regarding your high-asset divorce, you need an extensive assessment of your finances. This goes beyond your bank account balances, extending to an entire inventory of your assets, balances of retirement accounts, and information about when each of these assets was acquired. 

For example, if you had a high-value retirement account prior to getting married, much of it may be considered separate property—but anything you contributed to it during your marriage would be considered marital property, which means it would likely be divided.

You’ll also want to document the various income streams funding your marriage. This is an issue that most couples don’t have to worry about, but high-net-worth couples often have lots of income streams that must also be handled appropriately during divorce.

Exploring the Division of Assets

West Virginia, like most other states, follows the legal principle of equitable distribution. This means that assets must be divided in a way that is fair and just, not necessarily in a way that is equal. This allows the court to take a number of factors into account when deciding how assets should be handled, including each party’s earnings, each party’s earning potential, custody decisions, health concerns on either side, and each party’s contributions to the marriage.

This is often the most time-consuming part of a high-asset divorce. The more assets you have, the longer it takes to negotiate what happens to them. It’s important to have a game plan before you start negotiations, which means knowing what your priorities are and where you have some wiggle room.

The Role of Alimony

It’s also important to think about the role of spousal support or alimony in your high-asset divorce. Spousal support isn’t assumed in West Virginia, but it plays a role in a lot of high-asset divorces. If one party stayed at home as a homemaker or stay-at-home parent during the marriage, there’s a good chance the other party will need to provide them with spousal support. 

The amount and duration of spousal support are determined by numerous factors, including the length of the marriage, the financial assets of each partner, how the assets are divided, what each party contributed to the marriage, and whether or not the lower-earning spouse is likely to become self-sustaining at any point in the future.

The Emotional Issues of a High-Asset Divorce

The emotional challenges you may face during a high-asset divorce may take much longer to grapple with than the financial side of your split. It’s likely that you and your spouse built your empire together, and divorce means the end of everything you’ve worked so hard on. Seeing the assets, businesses, and income streams you’ve created together picked apart piece by piece can be extremely painful, and trying to figure out how to navigate family life as a single parent only adds to the burden.

It is crucial that you protect your mental health during this time and get the support you need to navigate your emotional needs. Many people find it helpful to work with a licensed therapist or counselor. You may also seek solace in a local divorce support group, where you can talk to others going through the same difficulties as you.

Explore Your Legal Options with Pence Law Firm

The team at Pence Law Firm is here to help you work through your high-asset divorce and fight for what you need in your post-divorce life. Let’s sit down and discuss your needs—call us at 304-345-7250 or send us a message online to get started.

The Growing Issue of Cryptocurrency During a Divorce

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While cryptocurrency has brought an entirely new group of investors to the world of finance and provided new investment opportunities, it has also made a number of issues more complicated. In particular, divorce can be especially challenging when one party invests a substantial amount of money in cryptocurrency. Cryptocurrency is naturally harder to track than more conventional types of currency, and if one partner doesn’t even know that they should be looking for cryptocurrency, they could get a smaller share of the marital assets than they deserve.

That’s why it’s important to work with a Charleston divorce attorney with extensive experience in cryptocurrency and other trends that may affect the outcome of your split. Call Pence Law Firm at 304-345-7250 to set up a consultation with our team at your earliest convenience.

Volatile Value

One of the most difficult aspects of cryptocurrency is its constantly fluctuating value. While stocks are also prone to dramatic drops and increases, these types of drastic changes are far more commonplace across the realm of cryptocurrency. This can make it extremely difficult to get a fair valuation on cryptocurrency, as its value during negotiations could be significantly higher or lower than its value when the divorce is finalized. Any massive change in value could require an entirely new division of assets in order to preserve the split of assets previously agreed upon.

Identification and Tracing

In many cases, even identifying and finding cryptocurrency can be a challenge. This is where it’s often helpful to turn to a forensic accountant with experience in cryptocurrency and digital assets. Those who spend a substantial amount of money and time on their cryptocurrency trades may have multiple wallets in which they keep their crypto, which can make it easy to “disclose” some assets while actually having the majority of them stashed away. 

This is especially risky when one partner is heavily into cryptocurrency and the other knows almost nothing about it. Furthermore, it is relatively easy to trade cryptocurrency multiple times in quick succession, which makes it far harder for outside parties to trace the transactions and figure out where the money ultimately ended up.

Disclosure and Hidden Cryptocurrency

The novelty of cryptocurrency means that the divorce courts haven’t quite caught up with it. Many individuals are relying on their spouses to do the right thing and disclose their assets, including those they would otherwise not know about—and that is not a risk you want to take when your financial future is on the line. 

If you don’t know that your spouse dabbles in cryptocurrency, there could be tens of thousands of dollars of assets that you don’t even know about. The good news is that those who are into cryptocurrency are often fairly talkative about it, so unless they’ve been trying to hide these assets from you from the very beginning, there’s a good chance you’ll know about their investments.

Division of Cryptocurrency

Fairly dividing cryptocurrency can be a point of contention during a divorce. First, there’s the issue of fair valuation, which we discussed earlier. Second, once you agree upon a split, you have to decide what to do with the cryptocurrency. There’s a very real possibility that the spouse who was previously uninterested in cryptocurrency is still uninterested, and they won’t want to go through the steps of making a wallet and getting set up on a trading platform. However, simply exchanging the cryptocurrency for cash can trigger additional taxes for the party who does the trading, which further complicates the division of assets. 

Offsetting the value of the cryptocurrency with another asset is a common solution. Not only does it allow the crypto-interested partner to keep their cryptocurrency and let it keep growing, but the party without any interest in cryptocurrency can get their share without having to learn an entirely new vocabulary.

Choose Pence Law Firm for Your Divorce

Wondering about how cryptocurrency will affect your divorce and the division of your marital assets? The team at Pence Law Firm can help you explore your options and come up with a plan. Reach out online or call us at 304-345-7250 to set up a consultation with our team of experienced divorce lawyers.

The Role of a Forensic Accountant in a High Asset Divorce

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High-asset divorces are considerably more complicated than standard divorces. The more money and assets a couple brings to the table, the more work it generally is to sort them out fairly. It’s particularly complicated when there are numerous income streams that are difficult to track, hidden assets, and assets that fluctuate significantly in value.

That’s why it’s important to have an attorney with experience in high-asset divorces. We understand the importance of carefully tracking assets and income, and we know the benefits of working with a forensic accountant. Call Pence Law Firm at 304-345-7250 to set up a consultation with our team of Charleston divorce lawyers.

What Do Forensic Accountants Do?

Forensic accountants are financial professionals who have extensive training in investigative techniques and their use in evaluating financial records and evidence. Forensic accountants apply their expertise to account records, transaction logs, tax documents, and other financial documentation. Their experience puts them in a position to identify irregularities and discrepancies, as well as provide expert opinions about the sources of funds and assets.

In divorce cases, forensic accountants are often brought in to identify and value income streams, as well as to identify and track down hidden assets. They are particularly helpful in divorces where one spouse has full control of financial accounts, and the other spouse is entirely in the dark about their financial well-being.

Asset Tracing and Valuation

One of the responsibilities of a forensic accountant is identifying and valuing marital assets to ensure the equitable distribution of those assets. Their financial analysis skills allow them to prove accurate valuations and track down assets that may have gotten lost over time—for example, retirement accounts or old bank accounts that have sat unused for years. Asset tracing is especially important when one spouse is attempting to avoid the fair distribution of marital assets. They may give away or sell assets for below market value with the plan of getting them back after the divorce.

Income Stream Analysis

High-asset divorces often have numerous income streams, which can make it difficult to get an accurate financial picture of the couple’s annual income and overall financial value. Forensic accountants can analyze annual incomes, bonuses, rental income, executive stock options, business profits, and dividends. They do this by digging through financial statements, bank records, tax returns, and other financial documentation to identify every way a couple earns money. 

This is incredibly important when it comes to calculating spousal support and child support. It’s also important when it comes to dividing assets, as those same assets may be tied to income streams. For example, a rental property or family business may make up a sizable chunk of the family’s income. Fairly dividing those assets is easier when you know the true value of the income streams.

Cash Flow Investigation

This skill is crucial when one spouse is entirely dependent on the other for financial support and information. When only one spouse has access to the couple’s finances, it is very easy for them to manipulate and misdirect their partner. In turn, this makes it incredibly difficult for the partner who isn’t involved in the finances to get far less than they deserve during the divorce. 

A forensic accountant may look for irregularities or discrepancies that don’t match up with a couple’s financial documents. In doing so, they may find ways that the spouse who handles the finances has accrued substantial debt, committed tax fraud, supported their affair partner with marital finances, or attempted to hide income streams and assets from their partner. In uncovering these acts of deceit, the forensic accountant gives the other partner the information they need to fight for what they deserve during divorce. A fair divorce settlement is only possible when both parties have full access to accurate, transparent financial information.

Prepare for Your Divorce with the Help of Pence Law Firm

As you begin to plan for life after divorce, make sure you have the support of the team at Pence Law Firm. Call us at 304-345-7250 or get in touch online to schedule a consultation with our team of Charleston high-asset divorce attorneys.

Coping With Lifestyle Adjustments After a High Asset Divorce

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Adjusting to life after divorce is difficult under the best circumstances—and when you’re transitioning out of a life where you became accustomed to substantial assets, it’s even more challenging. If you’re preparing for your next step in life but the transition is bumpier than expected, there are things you can do to help yourself through it.

With the right legal team by your side, you can prepare for your next chapter in life and fight for the assets you need to maintain your lifestyle. Call Pence Law Firm at 304-407-7852 to set up a time to meet with our team of divorce attorneys.

Realistic Financial Planning

During the divorce process, it is crucial that you spend some time creating a realistic financial plan. This is easier after you’ve negotiated the division of assets and debts, as you’ll know how much you have to pay each month in debt and how much cash you’ll have on hand. Using your income streams, debt payments, and other required monthly expenses, figure out how much you have left over each month. From there, you can figure out where you have room to add in services and goods that matter the most to you. 

For example, if you have multiple children, a meal service or house cleaning service may be non-negotiable for you. If fitness is your only “you” time, a membership at your boutique fitness studio may be at the top of your list. If you can’t keep everything, figure out what matters most to you.

Assessment of Needs and Wants

When you get used to life at a certain level, your wants can quickly start feeling like needs. If you’re like many people navigating a high-asset divorce, you’re likely in this same boat. As part of your divorce process, consider meeting with a financial planner. Bring all of the information you can, including retirement accounts, banking statements, sources of income, debts, and any agreed-upon alimony or child support. 

A good financial planner can give you a breakdown of your finances and be blunt about what you can and cannot afford. Remember, you can always add luxuries back into your life if you find that you have extra money. But trying to cut back once you’re already behind is stressful and mentally draining.

Leaning Into Your Social Circle

It’s always recommended that you rely on your social circle during divorce. It’s one of the hardest things you’ll ever go through in life, and having good friends and family members by your side can ease the transition. It’s even more important when you are also losing your lifestyle. Spending time with loved ones can help you adjust to your new normal and help you see the beauty in the life you have now. Additionally, they may be able to help you tap into resources that are available to you. 

For example, if you’ve lost access to an exclusive fitness studio you attended when you had more money, your friends may help you find another supportive group at their favorite gym. If you had to give up an expensive hobby that brought your life meaning and joy, your friends may help you find something you love just as much.

Mental Health Support

Counseling is an excellent resource for anyone going through divorce, and it is particularly helpful if you’re having a rough time acclimating. People often avoid this, as they feel like getting help for a loss of assets or income takes away services from those in greater need. But remember that therapists are there to help people through every challenge they face in life. 

A sudden change in lifestyle can be painful to work through, so why not turn to someone professionally trained in navigating life’s changes? As an added benefit, those who go through counseling during or after divorce often report better outcomes with post-divorce communication and co-parenting.

This highlights the importance of working with experienced legal counsel while navigating divorce. Even if you were not the high earner in your marriage, that doesn’t mean you should be left with nothing. Hiring a Charleston divorce attorney could help you get the assets and income streams you need to maintain your current lifestyle.

Preparing for Divorce? Call Pence Law Firm Today

The sooner you connect with an attorney, the better—divorce is complicated, especially when there are sizable assets involved. The team at Pence Law Firm is here to help. Schedule your consultation now by calling us at 304-407-7852 or filling out our online contact form.

Minimizing Reputation Damage During High-Profile Divorces

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Navigating a divorce is challenging for anyone, but when you’re a public figure who attracts the attention of the community and the media, there’s another layer of difficulty. When everyone is watching your every move, trying to get through a divorce with your privacy and dignity intact can seem like an impossible challenge. It’s crucial to work with an attorney with experience in high-asset, public divorces. We can put your privacy first and work towards resolutions that allow you to move forward with ease.

It’s time to learn more about your options as you move forward with divorce. Call Pence Law Firm at 304-407-7852 to set up a consultation with our team right away.

Prioritize Maintaining Privacy for You and Loved Ones

For many high-profile individuals going through a Charleston divorce, privacy is of the utmost importance. Having the dirty details of your divorce aired in the media is perhaps the easiest way to tank your reputation and ensure that it’ll come up every time someone Googles you. Name for the rest of your life. Even if you and your spouse are ending on especially contentious terms, this is hopefully one area where you can come to an understanding—especially if you have children who could be harmed by eventually seeing the details of their parent’s divorce. Even if your children are young now, the Internet is forever. It’s worth it to put privacy first.

As you work with your attorney, consider utilizing confidentiality agreements that bind everyone who works with you during this process. While you are already protected by attorney-client privilege when it comes to your lawyer, any PR specialists or financial professionals you bring in may not have the same professional standards in their field.

You should also limit your public statements. In most cases, saying nothing is better than saying something that you haven’t carefully planned out and scripted. This is one area where you want to choose every single move carefully.

Figure Out Your Approach to the Media

The media will take any scrap of information it gets and run with it. Engaging with the media will almost always come back to bite you, so you should always be a few steps ahead of them. Communicate with media selectively and on your own terms. Working with a spokesperson or media liaison is one way to limit the amount of speaking you personally have to do, which lowers the risk of unintentionally saying something the media can spin against you.

In many cases, making a brief statement to the media and setting clear boundaries can limit the chatter around your divorce. A good statement addresses the divorce, gives no exciting details, and outlines your wish for privacy for your family during this time.

If unfortunate details of the divorce have already reached the media, this may be a good time to consult a PR specialist about limiting the damage to your reputation and putting your best face forward.

Work Through Issues in Mediation to Avoid Public Court Battles

Settling the key decisions of your divorce in mediation is one of the best ways to limit the information available to the public. When you let the judge make important decisions in your divorce, those court records become public records—and it won’t be long until the media starts picking it apart for details they can use to shape public opinion of you. 

Agreements reached in mediation are private and sealed, helping both parties to protect their and their loved ones’ privacy. Additionally, navigating complex issues in mediation allows you and your spouse to maintain control over the decision-making process. This is especially important when there are sizable assets being divided. Many divorcing couples find that discussing these issues during mediation paves the way for a strong co-parenting relationship and prevents the divorce from becoming too adversarial.

Prepare for Your Divorce with the Team at Pence Law Firm

If you’re concerned about preserving your reputation throughout the divorce process, the team at Pence Law Firm is here to help you. Call us at 304-407-7852 or fill out our online contact form to find out how we can support you as you prepare for the next chapter in life.

The Impact of Divorce on Executive Compensation Packages and Stock Options

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When you’re navigating a high net worth divorce, you’ll face challenges and complex issues that rarely arise in other divorces. In these splits, the division of assets and the topic of spousal support often lead to the most bitter disputes between the divorcing spouses. If one spouse is a high-powered executive, navigating the division of assets and alimony requires even more experience and knowledge. The multiple types of compensation received by executives and the schedule on which they’re paid out can make this step of the process drawn-out and stressful.

It’s crucial to work with an attorney with experience in this type of divorce. Whether you are the executive in this equation or the lower-earning spouse, it’s important to fight for fair and equitable treatment. Call Pence Law Firm at 304-407-7852 to set up a consultation with our team now.

How Executive Compensation is Structured

Executive compensation may be structured in several different ways, depending on the company involved and what the executive in question negotiates for. Elements commonly found in an executive compensation package include:

  • Base salary: Executives do earn a base salary, but in comparison to the rest of what they bring in, it is a relatively small chunk of their income.
  • RSUs and stock options: Restricted stock units, known as RSUs, are shares of company stock given to executives with significant restrictions. Stock options allow an employee or executive to buy stocks at a predetermined price.
  • Bonuses: Bonuses, which are generally dependent on changes made by the executive and the company’s performance as a whole, can be a sizable part of an executive’s income each year.
  • Deferred compensation: Deferred compensation is generally paid out at retirement. It allows the executive to hold off on receiving part of their income until they retire, at which point they will have to pay taxes on it.

It’s clear that these types of income can lead to a drawn out division of assets. It’s easy to determine spousal support, child support, and an equitable division of assets when both parties earn a set annual salary or hourly wage. It’s much harder when their income may change by millions of dollars each year or hinge on the performance of the stock market.

Calculating Executive Compensation

One of the main challenges in this type of divorce is figuring out how much should be paid in child support and spousal support. Again, when there’s an annual salary or hourly wage being paid, it’s just a matter of plugging the numbers in and going from there. But how do you determine what’s fair when the high-earning spouse’s income is split across different assets, stock options that may not vest for years to come, and bonuses that are dependent on future performance?

Your attorney may look at what the executive has actually received in income throughout their time with their company. If they have held that position for a number of years, it’s easier to calculate the average income even with varying bonuses and stock options. The attorneys may also look at the standard of living that both spouses have come to expect, which gives them a guideline of how much the lower-earning or non-working spouse should receive.

For child support, it’s important also to think about the lifestyle that the child is accustomed to. It’s common for children of executives to be enrolled in private school, participate in costly extracurricular activities, and have other expensive needs. The court will likely want the child to maintain that standard of living even after a divorce.

Valuing and Dividing Stock Options

This is a huge hurdle to clear in a high asset divorce. Stock options are often a major part of an executive compensation package, but their terms and value may differ quite a bit. The vesting schedule may come into play, especially if the stocks cannot be purchased or accessed for several years. It’s also important to consider the tax implications of exercising stock options and determine how that may affect their division. When it comes to the valuation of stock options, the Black-Scholes model may be used or your attorney may recommend another option.

Choose Pence Law Firm for the Legal Support You Deserve

As you start to look ahead to life after divorce, make sure you have the financial support you need for a fresh start. Find out how Pence Law Firm can fight for the assets and support you deserve. Call us at 304-407-7852 or get in touch online now.

Mitigating the Risks of Business Depreciation During High Asset Divorces

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When a couple owns a business together, protecting that business during a divorce can be a top priority. It’s not uncommon for businesses to be negatively affected during a divorce. Stockholders worry about the future of the company, are uncertain about whether a massive stock transfer will affect the company’s value, and wonder if consumers will follow the company on its new path. A business’s value tanking during a divorce can make it incredibly hard to divide it fairly and leave both parties without the assets they need to move forward.

As you navigate divorce in Charleston, it’s important to work with a legal team you trust. Call Pence Law Firm at 304-345-7250 to set up a time to talk to our experienced team.

Valuation Strategies for Business Assets

It’s important to get a fair valuation of a business as part of your divorce. This ensures that the business is divided equitably and helps you verify that your efforts to protect the business’s value are successful. There are several different strategies you may consider.

Some couples opt to go for the market value of the business. This involves looking at what the business would sell for on the open market. This is in comparison to the book value method, which is what shareholders would get if the company’s assets were liquidated and debts paid off.

Another option that may make sense is income-based valuation. Income-based valuation can be fairly complex, as it looks at the company’s earnings and applies factors like amortization, depreciation, and taxes.

Regardless of which option seems to make the most sense for your needs, it’s important to work with a financial professional.

Protecting Your Business and its Assets

There are different ways that individuals can protect their business assets in the event of a divorce. Unfortunately, most of these methods rely on premarital or at least pre-divorce planning. Once you’ve reached the point of divorce, your options have already decreased significantly.

Prenuptial and postnuptial agreements are obviously useful in this situation. If one party owned the company prior to the marriage, a prenup or postnup may ensure that the business stays with them after a divorce.

Buy-sell agreements are another way to plan for divorce before a split actually happens. They lay the groundwork for how the business will be handled if the marriage ends. This takes a lot of guesswork out of the equation; should the couple decide to divorce, the terms of the buy-sell agreement simply go into effect.

If you did not make any sort of legal agreement before deciding on divorce, protecting your business assets may be more complicated. In these situations, it’s important to work with a high-net-worth in Charleston. They understand the factors at play and can provide different solutions that allow you to keep the business safe and growing.

Continuity Planning During Divorce

While navigating your divorce, you’ll also need to engage in continuity planning that secures the future of the business. Clear protocols regarding day-to-day operations ensure that important tasks do not fall by the wayside as the owners handle their personal issues. A contingency plan may name people to take on the owners’ daily tasks when personal issues arise.

You can also plan for the future success of the business by carefully handling how the divorce is announced and handled. A couple should decide when and how to announce their divorce, rather than letting the media get a hold of the news and control the narrative. This gives them the chance to present a united front, calm shareholders’ worries, and clarify the future direction of the company.

In the time between deciding to divorce and announcing the divorce, the couple can come up with their continuity plan. It can be difficult to work together under these circumstances, but remember that you both rely on the financial stability provided by the business—handling these matters together is best for everyone involved.

Facing Divorce? Choose the Pence Law Firm for Your Family Law Needs

As you prepare for your Charleston divorce, choose a legal team that you can rely on through the entire process. Call the Pence Law Firm at 304-345-7250 or fill out our online contact form to connect with a team member.

Dealing with The Tax Consequences of a High Asset Divorce

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A high net-worth divorce requires a sound legal and financial strategy in order to protect your best interests. The decisions you make at the time of divorce will majorly impact your finances going forward. High-asset divorces come with significant tax implications because of the large financial stakes involved.

The most prudent way to deal with this situation is to hire an experienced divorce attorney in West Virginia that has a thorough understanding of the potential financial and tax implications. The right attorney can provide you with the right advice at every step.

Asset Division in a High Net Worth Divorce in West Virginia

In West Virginia, marital assets are divided based on the doctrine of equitable distribution. This means that assets are not necessarily divided 50 – 50. Instead, the court will divide them in a fair and equitable manner. Several factors come into play that may leave one spouse with a larger share of the property. These are:

  • Contributions made by both spouses towards upkeep and acquisition of marital property.
  • Earning capacity of the spouses.
  • Liabilities and debts of the spouses.
  • Length of marriage.
  • Factors leading to the divorce.

Marital property essentially refers to those that are acquired after marriage. Property acquired before marriage may be termed marital property if the contributions made by either spouse led to a significant increase in its value.

Different types of marital property can be divided in the event of a high net worth divorce, such as business assets, residential and investment properties, vacation homes, bank accounts, overseas accounts and investments, stock market investments, retirement accounts, automobiles, jewelry and antiques, life insurance policies, and trusts among others.

Typical Tax Consequences During a High Asset Divorce in West Virginia

Change of Tax Filing Status

Divorce is likely to change your filing status since you won’t be allowed to file joint returns with your spouse. You need to adjust your withholdings after understanding the implications of the status change as the divorce proceedings move forward.

Possible Capital Gains Taxes on Liquidation of Valuable Assets

Capital gains tax is a tax levied on the profit from the investment or sale of a property. Divorcing couples with several high-value assets and property may decide to liquidate a few of them. You need to be careful while doing this. Asset liquidation may trigger capital gains tax liability. This means you could be taxed on the property acquired through the divorce.

It’s possible that your property is worth more now than what you had initially paid for. It is recommended to transfer the property to the other spouse. This way it will be taxed only when the spouse decides to sell it down the road. Capital gains taxes are calculated on the value increase in the property. These taxes don’t take into account the property’s value during the transfer.

Exemptions Related to Child Tax Credits

You and your spouse need to decide who gets child tax credits and any related exemptions. Only one taxpayer is allowed to claim child tax credits in a specific tax year as per the IRS. You may be able to increase certain breaks by claiming a dependent child. This includes earned income credits, dependent tax credits, or a more favorable filing status.

It can be difficult to determine which spouse gets to claim the children if a couple gets legally separated or divorced. In general, the parent with the primary physical custody gets to claim the child as a dependent. An experienced divorce attorney will usually recommend allowing the higher-income parent to claim the child as a dependent to obtain more tax savings.

Division of Retirement Benefits and Accounts

Tax-advantaged savings accounts, such as IRA and 401K are also divided during a divorce. You may get hit with an early withdrawal penalty if you don’t take the right steps to protect your savings. It’s fundamental to have an accomplished and committed divorce attorney look at your finances if you don’t want to incur penalties while sharing the retirement holdings.

Choose a Results-Driven High Asset Divorce Attorney in West Virginia

The skilled high-net-worth divorce attorneys at the law office of Pence Law Firm can ensure that you have fully considered the tax consequences of your decisions made during the divorce. With our extensive experience in handling complicated divorce and financial issues, we can help you arrive at the best possible resolution that not only protects your financial and tax interests but also allows you to take care of your family’s needs.

To set up your free and confidential consultation, call 304-345-7250 or reach us online.