Figuring out how to divide complex assets is often one of the most time consuming parts of the divorce process. From houses to retirement accounts to collectable items, many couples own things together that can’t be split down the middle.
Some high net worth couples assume that when worst comes to worst, they can sell everything and divide the profits. However, this approach can have major tax implications as well as costs associated with the sale, which often makes it better to try to work it out with the assets intact.
One example of this would be the family home. If there is a choice between a home that is already paid off and a bank account of the same value, many people might lean towards the home especially for sentimental reasons. But before the decision is made, it’s important to look at it from all angles. What does it cost to maintain the house? Where would you want to live if not in the house? What are the tax implications? The answers to these and other questions can clarify the choice and help determine what the most beneficial option will be.
For other types of complex assets, like an interest in a business or a valuable piece of art, it’s important to ask similar questions. What are your alternatives? What would you give up to keep it? What are the costs associated with keeping it? What are the risks associated with the asset?
Along with considering these issues, it is also often helpful to consult with a qualified and experienced divorce attorney.
Source: Forbes, “How To Handle Difficult To Divide Assets” Jeff Landers, Sept. 18, 2012