Legal assistance is often needed during high-asset divorces to address issues such as property valuation, existing prenuptial agreements and hidden assets.
High-asset divorce can introduce several unique concerns, from protecting personal items of substantial worth to planning for the tax implications of divorce. Often, these issues have huge financial stakes, which can make handling them independently risky. In light of the following challenges, hiring a lawyer is often a critical first step for anyone preparing for a high-asset divorce in Bethesda or other parts of Maryland.
1. Valuating property
Many high-asset couples own complex property, such as businesses, rental properties, or stock options, and assessing the value of this property can be challenging. Furthermore, as The Wall Street Journal notes, different assets often carry distinct tax implications and hidden costs, which can make the true value of certain assets even harder to evaluate. It’s imperative that spouses work with an attorney who can help them inventory both marital and separate property and correctly assess its worth.
In Maryland, an accurate assessment of each spouse’s income, assets and liabilities can provide the foundation for numerous important aspects of a divorce settlement. These include child support, which is based directly on each spouse’s income, and alimony and property division, which take each spouse’s assets into account. As a result, an incorrect valuation of marital or separate property may leave a spouse facing significant financial losses.
2. Uncovering hidden assets
Similarly, divorcing spouses may suffer financially if their final settlement does not account for all marital and separate property. While the risk of a spouse hiding assets may seem trivial, research suggests that this type of concealment is common. According to CNBC, in one survey, over 7 million Americans admitted to hiding a bank account from a spouse or a live-in partner. During divorce, this type of deception may be even more widespread.
An attorney may be able to help a spouse identify common signs that assets are being concealed and take steps to uncover those assets. These measures include reviewing available financial statements, subpoenaing financial records, and taking testimony while the other spouse is under oath.
3. Evaluating prior contracts
Many adults who possess significant assets choose to draft prenuptial or postnuptial agreements to address the disposition of those assets in the event of divorce. However, spouses in Maryland may be able to challenge either type of agreement on various grounds, according to CNBC. These marital contracts may be invalid if any of the following facts can be proven:
- One person signed the agreement while facing duress or coercion.
- One person provided the other with false financial information.
- The agreement overly favors one person in an “unconscionable” manner.
An attorney may be able to help a spouse evaluate whether there are grounds for contesting a prenuptial or postnuptial agreement. Conversely, an attorney may be able to help a spouse make the case for upholding a preexisting contract.
4. Tailoring a settlement
A lawyer also may be able to advise a spouse on pursuing an appropriate settlement, given the spouse’s financial standing and long-term goals. Divorcing spouses often need to consider several difficult issues, such as whether keeping the family house is feasible. An attorney can help a spouse understand the financial implications of each option and the way that each choice may affect the rest of the settlement.
Preventing harmful missteps
Divorcing spouses should remember that under Maryland law, many aspects of a divorce, including property division, are not eligible for modification later. This makes securing a reasonable initial settlement critical for spouses. An attorney may be able to help a spouse review the applicable laws, understand his or her rights, and identify a fitting strategy for navigating the divorce process.