Divorcing couples with substantial assets have additional considerations when it comes to spousal maintenance and property division. If you are facing a high asset divorce, it’s vital that you hire a Colorado divorce attorney who understands your special circumstances.
Hire an Attorney for Your High Asset Divorce
Robinson & Henry’s Family Law Team has experience helping individuals in a high asset divorce protect their best interests when it comes to issues like property division and spousal maintenance. In Colorado, courts allow spouses to represent themselves in a divorce matter. We do not recommend that in most instances, and it certainly is not recommended in a high net worth divorce. Call 303-688-0944 to begin your case assessment. Let our Colorado divorce attorneys protect your assets.
Special Considerations in a High Asset Divorce
Calculating Alimony in High Asset Divorce
In 2018, Colorado legislators passed statutory guidelines to give family courts some direction on how to award alimony. In Colorado, courts call it spousal maintenance.
Judges base their decisions about spousal maintenance on many factors with income being one of the most influential. The statutory guidelines found in Colorado Revised Statute § 14-10-114 call for courts to use gross income to calculate alimony. Here’s where that gets tricky for high-income earners. Colorado’s alimony formula does account for couples whose combined annual gross income exceeds $240,000.
That means the court will take other factors into consideration when it rules on spousal maintenance. Other factors the court will consider to determine an alimony award in a high asset divorce include:
- the recipient spouse’s ability to meet their own needs
- the paying spouse’s ability to pay the alimony and meet their reasonable needs
- all sources of each spouse’s income
- what kind of lifestyle was enjoyed during the marriage
- whether additional marital property could reduce or eliminate the need for support
This is not an exhaustive list of factors that the court will consider. Another major determinate is how long you and your spouse have been married. Was there a spouse who was the longtime breadwinner?
In a high asset divorce, it’s important to consult a divorce attorney who can discuss all of the relevant factors that will be considered by the court if you or your spouse requests spousal maintenance.
Do Not Hide Your Assets
Some people are tempted to hide their assets when they know divorce is looming. Do not do this. It’s illegal. If you’re concerned your spouse has or will hide assets, talk to a lawyer. Also, check out our article, 10 Signs Your Spouse is Hiding Assets.
Common Example of a Spouse Hiding an Asset
During his marriage, John purchased his dream vintage car valued at more than $150,000. He does not want to risk selling it or, worse, losing it to his soon-to-be ex-wife. So he decides to transfer the car’s title to his business partner.
The court will consider this transfer as fraudulent, and it will ultimately affect the divorce settlement—and in a negative way for John.
Individuals who hide assets during divorce can face fines, jail time, and other financial sanctions for their actions.
In all divorces, it is extremely important to identify all marital assets and ensure the court properly accounts for them. Your financial affidavit will require you to list assets, liabilities, and provide a complete inventory.
While it might seem like an unnecessarily tedious task, properly accounting for all valuable possessions and other assets, as well as debts, helps to ensure property division is equitable.
Consider the Tax Consequences of Property Distribution
During property division, possessions and assets sometimes are distributed to the spouses, while in some cases those assets might be sold and the proceeds distributed.
For example, if the spouses own a home together, it might make more sense to sell the home and distribute the proceeds from the sale rather than giving the house to one of the spouses. When spouses are awarded particularly valuable assets during property distribution—such as real estate or a piece of fine art—there can be significant tax consequences.
Why are tax considerations so important? If we think about a hypothetical case in which a couple is getting divorced and Spouse A was the primary earner during the marriage. Spouse B really wants to keep the family home, which is valued at $1 million. If Spouse B is awarded the house during property distribution, then s/he will likely receive less in liquid assets. When it comes time to pay taxes on the distributed assets, it may be difficult for Spouse B to come up with the money.
A Divorce Attorney is Your Best Advocate for Your High Asset Divorce
If you face a high asset divorce, it is important to seek advice from an experienced Colorado divorce attorney. Call 303-688-0944 to begin your case assessment.