One of the most difficult aspects of divorce is the equitable division of marital assets as required by Florida law. Asset division becomes more complex and emotionally charged when the divorcing parties’ assets have high monetary and sentimental value, which is often the case with art, antiques, and other collectibles.
The Tampa high-net-worth divorce lawyers of Florida Law Advisers, P.A., can provide the trusted knowledge and professionalism required to allocate high-value assets fairly during your divorce. We understand individuals’ attachment to rare or unique items and collections that take time and effort to acquire and cannot be replaced. Our team works with Florida-based appraisers to seek a fair and equitable outcome for you as we negotiate the division of high-value assets. Our guidance will protect your financial interests as we help you navigate the tax implications of a high-asset divorce.
Contact us today for a free consultation with a Tampa high-net-worth divorce attorney. Let a high-asset divorce attorney help you with complex property division.
Assets Involved in a High-Asset Divorce
A couple’s combined net worth of $1 million or more in liquid assets typically means theirs is considered a high-net-worth divorce. Florida law requires parties to a divorce to identify and divide between them all assets and debts acquired by either spouse during the marriage. These assets are considered marital property.
In high-asset divorce proceedings, marital property subject to equitable distribution may include:
- Real estate, including the family residence and additional properties
- Luxury automobiles, RVs, and yachts
- Investment accounts, including stocks and bonds
- Retirement accounts, such as pensions and 401(k)s
- A business or business assets, such as patents, stock, stock options, and inventory
- Contents of multiple bank accounts and/or trusts
- Cryptocurrencies
- Art, antiques, collections, and collectibles
Determining Equitable Distribution of Marital Assets
When facing a complex property division, a divorcing couple should present an asset division agreement to the court if possible. If the couple cannot agree on the division of marital property, the court will divide marital assets and debts between the spouses based on various factors that may not account for either party’s desires.
Dividing marital assets requires three steps:
- Identification of marital property. Marital property includes property and debts held by the couple at the time of their separation that were acquired during the marriage.
- Valuation of assets. Each piece of marital property must be appraised to determine its fair market value as of the date of separation. An appraiser must assess any liens attached to the property or the cost of selling the property.
- Equitable Distribution. An equitable distribution of marital assets is a fair allocation of property to each party. It is not necessarily an equal allocation. To divide assets, the parties may agree to sell certain pieces of property and share the proceeds or to trade possession of properties of equal or near-equal value until everything has been distributed. Most agreements require a combination of the two. In addition, certain assets may be sold to resolve marital debts or certain debts may be assumed by one party or the other.
The process starts with each party preparing an inventory of assets and debt, which is shared for the other party’s scrutiny. Then, assets of significant value must be appraised. In an amicable or collaborative divorce, the parties may agree to the assessments made by one or more appraisers. In a contentious divorce, each party will obtain their own appraisers and negotiate conflicting valuations as the assets are divided.
Negotiating the division of assets comes down to deciding who should take possession of each item and what must be sold for the proceeds to be split. For example, they may agree that she’ll stay in the family home, he will get the yacht, and they’ll sell the vacation home and divide the proceeds.
A down-the-line, 50/50 split may be impossible, but the outcome must be fair to both spouses – an equitable distribution — or the court will reject it.
If the court determines how assets are to be divided, it will take into account such factors as how long the parties were married, the financial needs of each party, the financial contribution each party made during the marriage, whether one party interrupted their career or education for the other’s benefit or contributed to the other’s education or career, and other similar issues.
When a Spouse Hides Assets During a Divorce
In high-asset divorces, one spouse might allege that the other has assets that do not appear in their inventory of assets. In some cases, our investigators uncover assets one spouse was never aware of.
If the court determines that one spouse has deliberately hidden or withheld financial information, the wrongdoing spouse may face contempt charges, fines, and imprisonment. If false statements have been made under oath, perjury charges may apply.
When a client thinks their estranged spouse is hiding substantial assets, we can file motions to have the court require them to disclose certain information about their property and financial holdings. This includes demands to produce specific documents, such as records of bank and brokerage accounts, tax returns, financial statements, and loan documents.
When necessary, we can submit written questions the party must answer in writing or compel depositions in which the party must answer honestly or face criminal penalties. Our experienced attorneys can also depose others privy to the suspected party’s financial affairs, such as business partners.
Once we have these records and statements, we engage a forensic accountant to examine the suspected spouse’s financial records. Forensic accountants can determine where missing assets have gone and how they were moved. The accountant can also testify as an expert witness during divorce hearings.
Additional Challenges When Dividing Substantial Marital Assets
The key challenges of dividing high-value assets in a divorce include:
- Prenuptial or post-nuptial agreements. A prenuptial or postnuptial agreement can cover a wide range of issues. Typically, it addresses the division of assets and debts in the event of divorce. A valid prenuptial agreement is a legally enforceable contract under Florida law. However, it can be challenged in a court of law. The grounds to void a prenup can include duress, coercion, failure to disclose assets, or fraud.
- Obtaining accurate valuations. The market value of real and personal property and financial assets continually changes. For assets in widely followed markets, such as real estate, stocks, and automobiles, we have references on which to base the values. For artwork, antiques, and other collectibles, the valuations are often based on the results of auctions or private sales, which can be affected by numerous factors.
- Businesses. If one spouse started and built a business during the marriage, they may feel that full ownership after a divorce is their due. But if the spouse did anything at all to help the business grow and thrive, they may be owed sweat equity for their contributions. A spouse might even ask to be compensated for the loss of their spouse’s time and attention if they spent an inordinate amount of time working instead of being a part of the marriage.
- Taxes. When a couple divorces and divides their marital property, the Tax Code says no gain or loss (thus no reason for taxation) is recognized for either party. This rule applies even if the transfer was in exchange for cash, the release of marital rights, the assumption of liabilities, or other considerations. Exceptions to this rule include certain transfers or property in trust and certain stock redemptions that are otherwise taxable.
- Pensions and Retirement Accounts. Benefits paid from a qualified retirement plan (such as most pension and profit-sharing plans) or a tax-sheltered annuity under a qualified domestic relations order (QDRO) to a plan participant’s spouse or former spouse must generally be counted as income by the spouse or former spouse. However, if you receive an eligible rollover distribution as the spouse or former spouse of a participant in a qualified retirement plan or a tax-sheltered annuity, you may be able to roll it over tax-free into a traditional IRA or another qualified retirement plan.
Our law firm may use forensic accounting services to help us identify assets in complex financial portfolios. These accountants can help determine the true value of assets held in trusts, closely held businesses, professional practices or partnerships, stock options and/or restricted stock units, deferred compensation, multiple accounts and properties held in different states or countries, and more.
We advise clients to consult their own accountant, tax professional, or qualified financial planner about current tax returns and planning for future tax liabilities.
Call Our Experienced High-Net Worth Divorce Lawyers in Tampa, FL
Navigating the equitable division of property for a high-net-worth divorce requires a sophisticated understanding of complex finances and family law. At Florida Law Advisers, P.A., in Tampa, our family law attorneys have the experience, resources, and dedication necessary to handle the unique challenges that accompany the distribution of substantial marital assets in a divorce. We are committed to providing strategic counsel that protects your interests and secures an equitable division of assets with as little stress as possible.
Contact us today for a confidential consultation. In a high-asset divorce case, you need a skilled divorce attorney on your side. Let Florida Law Advisers, P.A., guide you through the divorce proceedings involving a complex property division. Our goal is to help you retain assets that are important to you and should continue to belong to you.
