During high net worth divorces in Mooresville, there can be significant disputes about the equitable distribution of various assets. Seeing as some of these assets can be of extremely high-value, this is hardly surprising. In theory, equitable distribution is supposed to be a fair, dignified way for spouses to walk away with their fair share of assets. In practice, things may not go to plan. While it is true that some spouses are able to work out their differences easily, the division of assets can be a contentious issue, especially in the context of high net worth divorces. Amidst these disputes, you or your spouse may consider liquidating assets to simplify the process.
If you are considering this step, it is important to reach out to a qualified, experienced divorce attorney in Iredell County before you make your next move. If you choose to work with an attorney who is specifically experienced with high net worth divorces, you can give yourself a much better chance of reaching a positive financial and legal solution when dividing assets. In addition, these legal experts can assist you with virtually every other aspect of your high net worth divorce, including child custody and alimony.
Why Should You Liquidate Your Assets?Spouses may choose to liquidate their assets for numerous reasons. Perhaps the most common reason for this course of action is to resolve disputes. Many spouses negotiate for weeks prior to the actual court proceedings, and during this period they have the opportunity to mediate. If all goes to plan, these spouses can agree upon how assets will be divided without having to go to court.
What happens when spouses cannot agree on certain things? If these spouses reach a stalemate, liquidating assets may be the only viable course of action remaining. For example, if both spouses want access to a piece of real estate and neither one is willing to back down, the only remaining course of action might be to sell the property and then split the funds 50-50.
In addition, some spouses may be willing to liquidate assets simply to free themselves of the responsibility attached with continued ownership. Some spouses may be unwilling to continue paying the related taxes, fees, and costs associated with the upkeep and management of these assets. Perhaps a certain property requires significant upkeep costs, with various landscapers, maids, and so on. Maybe an expensive sports car will cost more money to maintain each year than one spouse is willing to endure. Finally, a spouse may want to liquidate assets simply because they do not want to spend time cooperating and working with their spouse as they manage the asset together.
You Need Permission to Liquidate AssetsEven though you might believe that liquidating your assets is the best course of action, it is probably not a good idea to sell off vast amounts of property without your spouse’s permission. Firstly, you have a legal duty to inform your spouse of any changes that occur within the finances of the marriage. Secondly, the divorce court needs to oversee and approve these kinds of transactions in order to make sure each spouse receives their fair share. You may even be accused of concealing assets if you are not careful.
Understanding the Tax ImplicationsTax issues are the number-one concern when it comes to liquidating your assets, particularly during a high net worth divorce. When you are dealing with high-value assets, you could incur massive tax bills as soon as you sell them. These taxable events could financially cripple you, especially if you are a spouse with no accessible funds with which to pay these tax bills.
The Bottom LineMost financial experts agree that “trading” assets is almost always preferable to liquidating them. This is because “trading” assets does not trigger a taxable event, while liquidating them does. Consider the factors at play, including the future value of various assets and the level of responsibility associated with their upkeep and management. While there is no “wrong” decision, it is important to make the right decision based on your unique goals and priorities.
Get Help From a Qualified Divorce Attorney in North Carolina TodayApproaching a high net worth divorce in Iredell County can be stressful, but this process becomes much easier when you have a legal advocate by your side. Reach out to Arnold & Smith, PLLC today, and you can tackle your divorce in a confident, efficient manner. We have plenty of experience with high net worth divorces, and we understand many of the unique concerns and considerations that surround the division of high-value assets. Give us a call today, and we can develop an action plan together.