Any divorce case is difficult and can take an emotional toll on those involved. If your divorce is complicated further by high-value assets, however, you can expect an even more challenging legal process – and a greater need to protect your possessions. While every case is unique, there are shared factors among most high-asset divorce cases due to related laws and special related issues. Here are five things to know if you’re heading into a high-asset divorce in Colorado.
Colorado Is an Equitable Division State
Colorado is in the majority as an equitable property division state. This means that in a divorce, the courts will determine property division based on what is the most equitable, or fair, for both parties. This may or may not be a 50/50 split. The courts will review many factors to determine how to divide a couple’s marital assets. These are the assets (and debts) that a couple acquired during their marriage. If you have any separate property – things that you owned before your marriage or high-dollar assets that were given solely to you as a gift or inheritance – these will generally be protected from division during a divorce case in Colorado.
Hiding Assets Is a Crime
If you are seeking a high-asset divorce, one of the first steps you and your spouse must take is completing a sworn financial statement. This must be provided within 42 days of the divorce petition being filed. It is accompanied by financial disclosures and a follow-up period, where either party can seek additional discovery to search for non-disclosed assets. Hiding assets is a serious offense, punishable by being held in contempt of court, which could lead to a jail sentence. If you are found guilty of hiding assets to try to circumvent property division in Colorado, you could face serious penalties.
Alimony Is Calculated Differently
High-income divorces often involve alimony (known as spousal support in Colorado). Spousal support is a financial award granted to the lower-earning spouse after a dissolution of marriage, to be paid by the other spouse. The purpose of alimony is to allow the lower earner to maintain the standard of living he or she enjoyed during the marriage. After an update to Colorado’s alimony law in 2014, if a divorce case involves a combined income of $240,000 or more, the courts do not use the typical state guidelines for calculating spousal support. For this reason, it is best to work with an attorney who can help you understand alimony in your high-asset divorce.
There Are Tax Consequences of Property Distribution
A high net-worth divorce case comes with inescapable tax consequences. The division of assets, businesses, properties and possessions often involves selling assets and distributing the proceeds. When dividing a jointly owned business, for example, a couple may decide that selling the company and splitting the funds is the simplest way to divide the property without having to work together after the divorce. This can come with tax issues for both parties. If you or your spouse is awarded a particularly high-value asset in a divorce case, the tax consequences for this can also be significant. Complex tax issues may require assistance from a Certified Public Accountant or attorney with specialized knowledge.
Complex Assets Often Require Professional Assistance
High-dollar divorce cases often involve unique and complex assets, such as businesses, retirement accounts, savings accounts, jewelry, stocks and bonds, investments, foreign accounts, real estate, and employment benefits. Dividing – and protecting – these assets can be difficult without a professional’s oversight. Your divorce case may also involve special legal elements, such as a prenuptial agreement, that require attention from an experienced attorney.
If you have a high-asset divorce case, protect your hard-earned money and property with help from The Law Office of Stephen Vertucci, LLC. Our Fort Collins divorce attorneys understand how to navigate Colorado’s laws and can find creative solutions for high-asset clients. Request your consultation today.