High-net-worth divorces can be especially lengthy and stressful, due to the substantial assets involved and the complicated issues they raise in connection with property division, child custody, and maintenance. They may involve multiple pieces of real estate, retirement accounts, bank accounts, business interests, stocks, and other assets. Often, additional litigation is necessary. If you or your partner has substantial assets, you have a lot at stake. You should consider enlisting a family law lawyer who understands the challenging, intricate situation you face. It is important not to try to handle a high-net-worth divorce by yourself, since the consequences of judicial decisions may be significant and long-lasting. Seattle divorce lawyer Sara Kim can carefully guide her clients through this process, protecting their interests at each step.Pursuing a High-Net-Worth Divorce
Although Washington is a community property state, assets and debts acquired during the marriage will need to be divided based on an "equitable and just distribution." This means the court will usually divide community property equally, but it has the power to divide the property according to principles of fairness. If a 50/50 division would put one spouse in a significantly worse position, the court has the discretion to make an award that is unequal so that the distribution is fair and equitable. This may have a particular impact in a high-net-worth divorce in which one spouse would be left in a particularly precarious financial condition with a 50/50 split.
Often, additional variables are at work in high-net-worth divorces. Wealth in these divorces may be connected to a business or business interests, and the business itself may be community property, in which case the business itself may be an asset that must be divided during the divorce. The fair market value of the business will need to be determined. However, if it was owned before the marriage, it may be necessary to determine its character: whether it is community, mixed, or separate. Determining the character of assets, including business interests, is a crucial part of property division.
It may be necessary to retain experts to evaluate and appraise a business, including its goodwill and its assets, or to offer opinions related to accounting, finances, or tax-related matters. Experts such as forensic accountants may also be retained to trace the sources of funds used to acquire assets and offer opinions about whether the business is community or separate property.
It may be necessary to involve an expert in valuing and identifying the character of other property as well, such as real estate, benefit plans, or investment interests. For example, stock options that are earned as part of one spouse's compensation during the marriage might be subject to division, depending on factors such as the vesting schedule and grant date. Deferred compensation plans that are considered community property may also present particular challenges. The divorcing spouse may not be able to obtain a share directly from the plan but will have to wait until distributions are made and tax issues are factored in. Broader discovery may be necessary in a high-net-worth divorce in order to make sure that the experts have all the information they need to make an informed appraisal of the assets. If assets are located abroad or in another state, you will want a lawyer who understands the tax implications and the possibility of other countries’ or states’ laws having an impact on the property division.
In general, tax issues require particular attention in a high-net-worth divorce. While some taxation is inevitable in a divorce, many tax consequences can be deferred, avoided, or reduced with appropriate attention. The way the property is distributed, and any spousal maintenance or child support, may have a significant impact on each spouse's tax burdens after the divorce. Failing to pay attention to tax implications can cost one or both parties substantial funds and potentially create trouble with the IRS.Consult an Experienced Divorce Lawyer in Seattle
Seattle divorce attorney Sara Kim has successfully negotiated reasonable settlements and helped her clients avoid litigation in many complex high-net-worth cases. Public exposure can be a concern, so it is important to retain an experienced attorney who understands how to minimize drama, excessive discovery, and the publicity of litigation in order to maintain privacy. We create a personalized approach to litigation, keeping your specific goals in mind. Attorney Sara Kim represents people throughout King County, including in Redmond, Kirkland, and Bellevue. Call us at (206) 622-6562 or use our online form to set up an appointment.