Special Issues in Illinois High Net-Worth Divorce Cases

 Posted on December 08, 2015 in Distribution of Assets

Divorce is often a complex mix of anger, resentment, and heartbreak. But, when you also have to deal with complicated financial holdings, business, and asset valuation, it can make the situation even more volatile. High net-worth divorces have issues not found in most other family law cases.

Finding, Valuing, and Understanding the Assets

Most high net-worth individuals hold a variety of different asset classes. Many of the assets are not held personally by the couple, but instead are in different holding companies or tied up in various business and investment structures. One of the challenges in a high net-worth divorce is finding all of the assets. It is not unusual for one spouse to try and hide assets.

Even when all the assets are clearly identified, it can be difficult to both understand what the assets are and what their value is. Often experts, such as forensic accountants, need to be hired to help evaluate the worth of the marital property.

Dealing With Losses and Taxes

It is not just assets that can cause special issues in a high net-worth divorce. Business losses can also be just as important. The spouse who has the right to claim business losses may reap large tax savings in future tax years. Under the IRS rules, these losses cannot be delegated in a divorce. Only the taxpayer who incurred the loss can claim them on a tax return. But, those losses can be taken into account when dividing up the marital property.

Property held jointly by a couple that is divided in a divorce typically does not cause any taxable event. However, if a company holds the property, the selling or transferring of that property or asset may be a taxable event.

Equitable Property Division

Illinois requires judges to split marital property equitably. This means that the division should be fair given all of the circumstances, but it does not have to be equal. Before any decision on splitting the marital property can be made, there has to be an agreement or a ruling about what property should be considered marital property. This can be difficult to determine in a high net-worth divorce.

If you have questions about business valuation, discovering hidden assets, property division, support, or any other family law matter you need to consult with an experienced and knowledgeable Lombard divorce lawyer. Call A. Traub & Associates today to set up a consultation.

Sources:

http://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm