Divorce For Professionals and High-Asset Divorce
Dissolving a marriage is rarely a simple process, but the matter becomes significantly more complicated when one or both of the parties involved are professionals with substantial assets and business interests. In these situations, divorce has the potential to impact a person’s long-term financial and professional future, affecting business associates, partners, and employees.
The term “high asset divorce” can be both confusing and misleading, “high asset” doesn’t refer to the amount of money in your bank accounts. It refers, instead, to any marital assets and property of high value. Things like homes and/or other real estate, business assets, investments, vehicles, collectibles, and a wide variety of other financial assets.
Reaching a swift and amicable solution to a high asset divorce in Texas is paramount, the best way to achieve it is by investing in an experienced high asset divorce attorney.
Marital Assets and Community Property
Marital assets include any property, both physical and invested, that was acquired by either spouse during the couple’s marriage. Typically, any assets considered marital property are subject to division and allocation in a divorce case. Texas, however, is a community property state. Here, all of the assets accumulated while married (with a few exceptions) are considered community assets, and there are particular rules when dealing with the disposition of community assets. Designation of community property and the allocation of property ownership can have a profound financial effect in a divorce proceeding.
That’s why both parties must have attorneys who are experienced in the specifics of local laws and well versed in high asset divorce in Texas.
Resolution Through Strategic Negotiation
Sometimes couples will choose to negotiate their divorce settlement instead of taking one another to court. If negotiations can be handled amicably by both parties, this is often in the best interest of all involved parties, instead of leaving the decision to a judge. A negotiated settlement tends to be quicker than litigation and gives each spouse more control over the details.
How divorce negotiations are handled and how assets are divided can go a long way in determining the tone of a couple’s post-divorce future. This is especially important when sharing custody of children, as the decisions that are made can, for good or ill, affect the rest of their lives. When couples seek a divorce settlement they should strive for a fair outcome that is as painless as possible and gets each spouse the property they deserve. A high asset divorce attorney can help you achieve those goals.
Gray & Becker, P.C., High-Asset Divorce Attorneys
The family law attorneys at Gray & Becker, P.C. specialize in high asset divorce in Texas and complex property and debt division. The attorneys work diligently with forensic accounting experts in complicated matters such as tracing and confirming separate property assets. The firm also has extensive experience working with business valuation experts to accurately value business interests and other valuable assets in a divorce proceeding.
Our high asset divorce attorneys have experience dividing assets that include:
- Stock options
- Restrictive stock options
- 401(k) accounts
- Pension plans and other retirement accounts
- Professional practices
- Real estate
- Oil, gas, and mineral interests
- Investment accounts
- Life insurance policies
- Annuities
- Business interests
The attorneys of Gray & Becker, P.C., understand this and the other unique needs of professionals involved in a divorce.
Past clients include physicians, dentists, attorneys, business executives, pilots, and other professionals. The firm’s combination of business insight and family law experience allows its lawyers to successfully resolve complex divorce cases through strategic negotiation and out-of-court settlements.
The legal team aims to protect the client’s interests by minimizing the effect of the divorce on business operations. Often this strategy includes tracing and documenting the client’s separate property.
Our firm routinely pursues the division of retirement accounts through qualified domestic relations orders (QDROs). Its attorneys are adept at developing creative strategies to accomplish a fair division of stock options and other potentially volatile investments.
Tax Implications For High-Asset Divorce
Our trusted Austin, TX high-asset divorce lawyer knows that dividing substantial assets during a divorce can create significant tax considerations. Proper planning and a thorough understanding of how taxes will impact the final settlement are crucial for protecting long-term financial stability. At GordenLaw, LLC, we focus on helping clients navigate these challenges effectively to reach outcomes that align with their financial goals. Our firm has received many awards, including Top Attorneys in 2020, and we take great care to focus on the needs of our clients.
Asset Transfers And Tax Treatment
When marital assets are divided, it’s important to understand the tax treatment of those transfers. In most cases, property transferred between spouses as part of a divorce is tax-free under current IRS rules. This means that no immediate capital gains taxes are due on the transfer itself. However, the eventual sale of those assets may trigger capital gains taxes, which should be factored into settlement discussions. For example, if one spouse receives a portfolio of appreciated stocks, they may face a considerable tax bill if they later decide to sell.
Real estate is another common area where tax implications come into play. Whether one party keeps the marital home or it’s sold and the proceeds divided, capital gains exclusions and other tax rules need to be carefully reviewed.
Retirement Accounts And Tax-Deferred Investments
Retirement accounts such as 401(k)s, IRAs, and pensions often make up a large portion of the marital estate. Transfers from these accounts must be handled correctly to avoid unnecessary penalties or taxes. A qualified domestic relations order (QDRO) is typically required to divide most retirement plans without triggering early withdrawal penalties or taxable events.
Our Austin high-asset divorce lawyer knows that for individual retirement accounts (IRAs), direct rollovers are necessary to maintain the tax-deferred status of the funds. It’s also essential to account for the differing tax treatment of traditional versus Roth IRAs when determining the division.
Alimony And Tax Law Changes
Recent changes in federal tax laws have significantly affected how alimony payments are treated for tax purposes. For divorces finalized after December 31, 2018, alimony payments are no longer tax-deductible for the payer, nor are they considered taxable income for the recipient. This change can impact cash flow and should be factored into negotiations to arrive at fair payment terms.
Additionally, high-income individuals may face challenges in balancing alimony obligations with other financial responsibilities, making it important to structure agreements that reflect current tax laws and income levels.
Tax Implications Of Hidden Assets
In high-asset divorces, undisclosed or hidden assets can create significant legal and tax problems. When previously undisclosed assets are discovered, there may be penalties or tax liabilities associated with their inclusion in the settlement. It’s critical to account for all assets accurately to avoid future disputes or tax consequences. Engaging professionals with experience in high-asset cases can help uncover potential issues before they become problems.
Planning For The Future
After the divorce is finalized, tax considerations continue to play a role in financial decisions. Updating estate plans, revising tax withholding, and preparing for potential changes to income or capital gains taxes are essential steps to maintain financial stability. Addressing these issues during the divorce process allows for smoother transitions and better financial outcomes.
At GordenLaw, LLC, we help our clients plan for the tax impacts of their divorce, ensuring that every decision is made with a clear understanding of its financial implications. Our firm has over 100 years of collective experience and we are prepared to help you. If you’re facing a high-asset divorce, contact our high-asset divorce lawyer in Austin today to discuss your options and start building a plan for your financial future.