What are some of the most important issues in a Louisville divorce with substantial assets? Divorce in the Louisville area can be both legally and financially quite complicated. A divorce that involves valuable assets such as a business or professional practice, substantial retirement accounts or pensions, real estate, investments or stock options will require an experienced, proven divorce, tax and family law attorney.
“Valuation” is a term that is important to understand in these cases. One of the first thing both parties must do in any Kentucky divorce is to complete a comprehensive set of disclosures, covering all assets or debts under either or both of the party’s names. Just because an asset or debt is only in the name of one of the parties doesn’t mean it belongs to that party. The Court will decide whether each asset or debt is a marital asset, the separate property of one of the spouses, or a “commingled” or “blended” asset that is partially a marital asset and partially the separate asset of one of the parties.
It is especially important for both of the former spouses to understand the concept of a “fiduciary duty.” Under Kentucky family law, the former spouses still owe each other a legal “fiduciary duty,” that basically requires them to continue to act in other other’s “best interests” until the divorce is finalized. This includes the legal duty to provide a full and accurate reporting of all assets and liabilities” held by either or both of the spouses associated with the divorce.
Therefore, one of the issues in a Louisville divorce with substantial assets is the ability to understand and report the genuine value of each and every asset and debt in the financial disclosures, and throughout the divorce case itself. For some of the assets, there is a published “market value” or account balance, such as retirement and investment accounts, as well as in financial or credit accounts. Valuation may be properly estimated through the use of “comparable value,” such as in real estate or some business applications.
Other assets, such as business interests, a professional practice, collections, or stock options may be more difficult to accurately value. In these cases, the Court must work to establish the valuation of a given asset before it can be managed as part of the process of marital property division. The process of valuation is, by its very nature, quite contentious in many cases. For example, if one of the spouses owns a business that is at least partially if not entirely marital property and wants to keep it after the divorce, the business owner would need to “offset” the other spouse’s marital interest in the business with other assets or money. The “business owner” wants the valuation to be as low as possible so that the amount they must offset is also as low as possible. The spouse of the business owner has an interest in the highest possible valuation, as that will provide much more to them in compensation for their marital interest.
Taxes are another of the important issues in a Louisville divorce with substantial assets. There is going to be a substantial impact on the post-divorce tax implications for both parties in the case. From a tax perspective, the basis in any given asset can have a genuine impact on the actual or “post-tax” value of that given asset. You would pay more in taxes on the sale of an asset with a low or zero “basis,“ versus the sale of an asset with the same value but a much higher basis. Tax considerations carry even more of an impact in cases involving substantial income, business ownership, a high net worth, or in situations where a spouse has given up their own career or made sacrifices to raise children or manage the household.
Spousal support or “maintenance“ is another of the important issues in a Louisville divorce with substantial assets. If you are considering a divorce involving a business, high income or substantial assets you are going to need the extensive, proven experience of the divorce, tax and family law attorneys at Dodd & Dodd.
We invite you to review the strong recommendations of our former clients and the legal industry and contact Dodd & Dodd or call 502-584-1108 to schedule an appointment with one of our attorneys.
