Five Tips To Protect Your Assets In A High Net Worth Divorce
Divorce is expensive and it is not uncommon for people to worry that they will lose everything. Fortunately, Pennsylvania follows the equitable distribution model of property division, so you will not lose everything you have during the divorce process. Still, your marital assets are subject to division, so it is important to know how to protect those that are most important to you. Below are five tips to help you do it.
When discussing property division issues with your lawyer, it is crucial that you evaluate and prioritize the assets you would like to retain once the divorce is final. You may first think of the emotional and personal ties you have to assets, but it is also important to consider the greater long-term value of certain assets.
Protect Your Retirement Savings
Retirement accounts and savings are one of the most common assets subject to division during high asset divorce cases. There are ways to protect these accounts, but there are also certain rules that must be followed. For example, you may have to obtain a Qualified Domestic Relations Order, which will determine how to transfer funds from different retirement accounts.
Consider Taxable and Non-Taxable Assets
It is easy to overlook the tax impacts of retaining certain assets. For example, part of your marital assets may include a bank account and a retirement account of approximately equal value. However, you should not simply allow your spouse to keep one while you retain the other. Bank accounts are accessible right away, and there are no tax implications associated with withdrawing from them. On the other hand, if you want to withdraw from retirement savings right away, you will likely have to pay taxes on the amount you access.
Do Not Take on Extra Debt
You may think that the time before your divorce is when to incur more debt. It will lower your overall income and may even potentially help you obtain more in spousal support. This is a common misconception. Family law judges are very familiar with the tactics spouses use when going through the divorce process. They will likely understand what you are doing and will hold you responsible for that debt, which could hurt your overall financial position. Even if you have to make a big purchase, such as a vehicle, try and wait until your divorce is finalized before you do.
Value Professional Licenses
High net worth divorces also often involve one or both spouses with professional licenses, such as held by doctors, lawyers, and accountants. These licenses are also assets and should be valued as such. This is particularly true if you made sacrifices in your own career to help your spouse obtain their professional license. You may have a right to reimbursement for the sacrifices you made.
Our Family Lawyer in Philadelphia County Can Protect Your Assets
If you are going through a high net worth divorce, our Philadelphia family lawyer at the Law Offices of Lauren H. Kane can help protect what is most valuable to you. Call us today at 215-918-9453 or fill out our online form to schedule a consultation and to learn more about how we can help.