Filing for a divorce is a complex process that is often costly and time-consuming, and when both parties have high-value assets, the stakes of the dissolution are raised. Often, high-asset divorces are contested. When a divorce or separation is contested, the two parties disagree on aspects such as the division of property and assets, as well as custody of any children the parties may have.
Important topics to consider while dividing assets during a high-asset divorce are the kind of property being distributed and how to properly handle pensions and retirement benefits, all of which a skilled attorney could assist with.
One of the biggest concerns during a divorce is that of property division. Especially in high-asset divorces where there could be assets totaling millions of dollars, it is important to label the asset as community or separate property.
Community property accounts for all things earned and acquired during the marriage, such as joint checking accounts or houses. States that divide property through community laws are Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico, and Wisconsin. In these states, all community assets will be divided equally between spouses. However, the remaining states, including Connecticut, use equitable distribution to divide property, which requires spouses with separate property to be fairly compensated.
Separate property belongs to one spouse and consists of assets acquired before the marriage or specifically gifted to one party, such as inheritance or a pension that was started before the marriage.
Another crucial aspect to consider during a high-asset divorce is how to properly divide pensions and retirement benefits, as many families carry much of their wealth in these accounts. During the dissolution of the marriage, the court may divide a pension in one of two ways: the present value method or the deferred distribution method.
During the present value method, the court determines the value of the pension at that given moment and awards it to the owner of the account. The court then orders the account owner to reimburse the other spouse a specific amount, relating to the value of the pension.
Conversely, with the deferred distribution method, the court signs a Qualified Domestic Relations Order (QDRO). The QDRO is typically drafted by an attorney and submitted to a judge for a signature. The document directs a portion of the retirement benefits to the employee spouse and the remaining amount to the non-employee spouse.
The QDRO is then sent to the entity that pays the benefits so the proper amounts may be allocated to both parties as specified in the document.
Divorces are never easy to maneuver, especially when one or both parties have high-value assets. Fortunately, attorneys at Dolan Divorce Lawyers have experience in this area of law and are dedicated to fighting on your behalf to get what you are owed.
Contact an attorney today and chart the best path forward.