Divorce is rarely an easy process, not only because of legal complexities but also because of the emotional toll it takes on couples. Ending a marital relationship is often the cause of much grief and emotional turmoil. However, this turmoil is usually heightened when financial disputes are also involved. High net worth divorces can often be challenging, as the division of assets is often more challenging and could have more severe consequences.
Large assets can often be a point of contention in high net worth divorces. In more straightforward divorces, the division of assets is often the simple task of deciding which assets go to which person. High net worth divorces, however, may require couples to split large assets that cannot be so simply divided.
An experienced North Carolina divorce attorney from King Law Office may be able to help clarify how assets are divided in high net worth divorces. Consider scheduling an appointment today at (888) 748-KING for more information.
Equitable Distribution in North Carolina
North Carolina subscribes to a policy of equitable distribution. This policy operates under the assumption that all marital property is subject to equal distribution between spouses. Generally, all marital property and divisible property are split evenly between both spouses in the divorce. Understanding this, it then becomes relevant to determine what is marital property and what is separate property. These categories often define the debate around property distribution in high net worth divorces.
Importance of Classifying Assets
One of the more divisive aspects of high net worth divorces, specifically when contested, and the classification of assets. Assets are divided in a divorce based on certain categories outlined in North Carolina G.S. § 50-20. How large assets are classified may determine how they are divided in high net worth divorces.
Marital Property
Marital property is defined by law as any property acquired after the marriage and before the separation of both parties. This can include real estate, business assets, investments, retirement accounts, and many more. Essentially, any property acquired by the individuals as a married couple is considered a marital asset with a few notable exceptions.
Separate Property
Separate property is defined as any property acquired before marriage or after the separation. Therefore, any preexisting property is protected from division as the law does not recognize it as jointly owned. Additionally, gifts, bequests, and property acquired by the exchange of separate property are also considered separate property. Gifts given from one spouse to the other may or may not be considered separate, depending on the stated intent of the gift.
Divisible Property
The third category, divisible property, generally covers income generated by marital property. This could include equity in a business, profit from investments made with marital property, and more. Most passive income from other sources is also deemed divisible property. However, divisible property does not just include passive income. Depreciation of marital assets or investments is also considered divisible property. Therefore, the accumulation of debts or any loss of value in an asset is also divided in a high net worth divorce.
A seasoned North Carolina divorce lawyer from King Law Offices may be able to offer details on the nature and classification of an individual’s property.
What is Divided in a High Net Worth Divorce?
In high net worth divorces, there are often many large assets that may require division. While understanding the various categories of marital property, divisible property, and separate property is important, it can also be beneficial to understand what large assets might look like and how they may be divided. The nature of these large assets could easily shift and change the proceedings in a high net worth divorce.
Business Assets
Business assets are one form of large asset that may come into play in a high net worth divorce. Investments in a business can turn a large amount of profit for a couple, specifically if the couple holds a managing share or has involvement in the running of the company. Additionally, entrepreneurial ventures can often have high value, specifically in the earning capacity of the owner. As business assets may generate passive income for the individual, this may complicate the division of assets in a high net worth divorce.
Pensions and Retirement Accounts
Pensions and retirement accounts are other large assets that could affect a high net worth divorce. Some couples invest tens of thousands of dollars in retirement accounts for their future, and these accounts could be considered marital property if they were initiated during the relationship. Revenue generated by these investments may also be considered divisible property, which is subject to equitable distribution. Vested and nonvested pensions such as military pensions and other deferred payments could also be subject to division in a high net worth divorce.
Real Estate
Real estate is often the largest asset that most families own, which can often make it difficult to divide. However, in high net worth divorces, there is a greater potential that high-value properties are involved or even real estate investments, including rental properties. Revenue from these properties may also be subject to division, as revenue from investments or properties acquired during marriage may be considered divisible property.
Fine Art and Collector’s Items
Additionally, some couples may own rare pieces of art or other collector’s items. These items may need to be appraised by an official appraiser to determine their market worth. As with real estate, the value of these works and collector’s items are often subject to the whims of the market. Having an accurate grasp of the piece’s value could impact how division is handled. Additionally, proper appraisal of personal property for tax purposes may also be required for high-value pieces.
Debt
While not generally considered when evaluating property, debt is often also considered a marital asset and must be divided along with other property. The amount of debt in play and the value of other assets may affect how large assets are divided. Understanding these nuances of North Carolina divorce law may help clarify the details of a high net worth divorce case.
A Skilled North Carolina Divorce Attorney Can Help
Divorces can be messy, especially when money is involved. High net worth divorces can lead to conflict and disagreements over large assets, which can add stress to an already trying time. Skilled legal counsel may be able to help alleviate this pressure by advocating for their client’s best interests in a high net worth divorce. Consider scheduling a consultation with a divorce attorney from King Law Offices by calling (888) 748-KING.