High-asset divorces can be particularly complex in Alabama. If you are fortunate enough to earn a substantial income, the stakes can be high when your marriage ends. Even if you are not a high earner, you could still have various high-value assets in your marital estate. Or, you could be married to a high earner, which opens up other issues.
Fortunately, there are distinct steps you can take to safeguard your financial future, whether you are a high earner or married to a high earner. The most obvious is to get in touch with an experienced divorce lawyer in Alabama, preferably one with experience in high-asset divorce, who can help you approach your post-divorce life with confidence and financial security. In the meantime, here are some issues regarding high-asset divorce which might interest you.
Be Wary of Commingling Assets
Alabama is an equitable division state. However, that does not mean there will necessarily be a 50-50 split. Instead, judges strive for fairness in their division of assets and debts.
Generally, marital property includes assets acquired during the marriage. In contrast, separate property includes assets owned before marriage. However, commingling assets can complicate matters. One way to safeguard assets acquired after the date of separation from the division is not to combine them.
That said, in Alabama divorces, parties must maintain the financial status quo that existed in the marriage through separation until the divorce becomes final. High-wage earners thus need to be smart and not commingle any assets during their separation that they acquired after the date of separation without compromising the non-high-earning spouse’s lifestyle. Many counties in Alabama even implement “standing” orders to maintain the status quo, which are enforced and implemented as soon as an individual files for divorce.
The high-earning spouse also must be very careful not to liquidate any assets or change their form or location. Once an asset becomes commingled, even though it could have been categorized as separate if kept apart, it will become a marital asset nonetheless. An Alabama family law attorney can assist you with a financial analysis and create a strategy for handling matters of this nature.
Understanding the Threat of Concealed Assets in a High-Asset Divorce
Understanding the threat of concealed assets in a high-asset divorce is imperative for both parties. If one spouse attempts to hide assets or manipulate financial information, it can result in significant consequences, including fines, a reassessment of asset distribution, and perhaps criminal charges.
Courts frown on fraud in any legal matter, including divorce, where total transparency is expected and demanded. Concealing assets can, and usually does, end up backfiring, leading to a more unfavorable outcome for the party engaging in the deceptive practices. Take heed.
As for the spouse who is not the higher earner, the risk of their spouse concealing assets can feel particularly threatening and worrisome. However, there are ways to uncover hidden assets, such as hiring forensic accountants to track financial discrepancies. It should also go without saying but deserves mention anyway: The non-high-earning spouse should similarly not engage in financially deceptive practices for the same reasons mentioned earlier.
Red Flags for Financial Deception
During a high-asset divorce, it can help to recognize the red flags of financially deceptive behavior. These can include but may not be limited to unusual spending by a spouse, dwindling funds without explanation or an obvious way to trace them, and the use of cash for certain expenditures to avoid tracking. Bottom line: If the behavior seems suspicious, it probably is, and you should document it for your lawyer to investigate.
Keep Detailed Financial Records
During the discovery stage of your divorce, your and your spouse’s attorney will gather evidence and assess the extent of both your and your spouse’s assets and debts. Accurate and thorough financial documentation is crucial in high-asset divorces, and having pertinent information organized will make discovery go smoothly and reduce costs. To that end, maintain records of all assets, including collectibles whose value may not be immediately apparent, as well as liabilities, income, and expenses.
Assemble a Skilled Team of Alabama Divorce Professionals
Beyond retaining legal counsel, you will likely require a team of financial experts, including forensic accountants, appraisers, and financial planners, for your high-asset divorce. Forensic accounts are particularly helpful to individuals married to and divorcing a high-wage earner and can assist with finding hidden assets.
These professionals can also assist with the valuation and division of assets and help develop a comprehensive financial strategy that your legal counsel may use to tip the scales in court. In other words, the work of a forensic accountant can benefit both spouses in a high-asset divorce. However, it is best if each spouse has their own forensic accountant, as they should have their own divorce lawyer.
Finally, the division of assets and alimony payments can have significant tax implications. Consulting a tax advisor or certified public accountant (CPA) to understand the potential tax consequences of divorce matters and develop strategies to minimize the tax burden can help. Your Alabama family law attorney may have a CPA on their team who they work with often on high-asset divorces to recommend.
Find an Experienced High-Asset Divorce Lawyer in Alabama
Going through a high-asset divorce as either spouse (the high-earner or the non-high-earner) can be stressful. The good news is the more you prepare, the more likely you will be to emerge with an outcome that is both fair and equitable.
At Summit Family Law, we are acutely aware of the unique pressures faced by high-net-worth spouses. We can help you confidently navigate this process, whether you need help with property division, alimony, child support, or any other issue. Our skilled and experienced Alabama divorce lawyers have considerable experience with high-asset divorce, and we have helped numerous spouses overcome complex issues over the years. We can help you.
With our support, you, too, can safeguard your financial future with confidence. Reach out today to book a consultation, and get started with an action plan.
