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High-Asset Divorces Require Special Handling

The dissolution of a marriage can be complicated, time-consuming and contentious. In a divorce between wealthy spouses — known as a high-asset divorce — division of valuable property and resolution of other financial issues can make the process even more daunting.

Couples with higher net worth have more to fight over and the process of settling their property interests can be far more difficult. In Michigan, a divorcing couple’s property is subject to equitable distribution, which means most assets and debts acquired during the marriage are divided fairly though not always equally. Unless the spouses come to an agreement, the judge will decide on a fair distribution by considering an array of factors that include each spouse’s contributions to the marriage, both economic and otherwise.

In a high-asset divorce, the couple’s portfolios typically are a complex mix of diverse types of property that must be allocated. These can include investments, real estate holdings and business ventures. Equitable distribution requires determining not only which assets are marital in nature but also each spouse’s ownership interest. For some assets, like pension funds and retirement plans held by one spouse, the other spouse may have a vested or expected share. If one spouse is a partner in a business, his or her ownership share may be subject to the spouse’s claim of having contributed to the business.

Valuation of assets is also more complicated. A small or closely held business’s fair market value must be measured by reliable accounting methods. Investment and retirement accounts may have floating values based on their expected earnings. Real estate values also can fluctuate widely. Jewelry, artwork and other high-end property may have to be appraised professionally. If one spouse disagrees with an asset’s assessed value, he or she can seek their own assessment, and the two will have to be rectified.

Although divorcing spouses are required to make full disclosure of their assets, it is possible that a spouse in high-asset divorce will hide, transfer or undervalue assets in order to give less property to the other spouse. If one spouse believes that the other is hiding or failing to disclose the true value of their assets, a forensic accountant or private investigator may have to be hired to conduct a thorough search and analysis.

Successful resolution of high-asset divorces depends in large part on each spouse’s willingness to negotiate. Most often, a property settlement agreement can be worked out, avoiding much of the time and expense associated with asset discovery and valuation. Some couples have prenuptial or postnuptial agreements in place precisely to cover property division in the eventuality of divorce. A carefully drawn property settlement agreement will generally be accepted by the court if it does not appear to be unconscionable in its terms.

At Shatzman & Shatzman, we are experienced in navigating the complex property issues involved in high-asset divorces. We serve individuals throughout Rochester Hills and the greater Detroit area. To schedule your free consultation, call 586-800-3018 or contact us online.