Are you searching for proven strategies for managing substantial assets in a Louisville divorce? If you earn a significant amount of money each year as a business owner, physician or licensed professional, corporate officer, senior manager, or even a commissioned salesperson, you most certainly have questions about minimizing your financial obligations related to the divorce now and in the future. The key in these scenarios is careful planning and preparation.
Did you and your spouse enter into a prenuptial agreement before the marriage? Have you considered a post-nuptial agreement to protect your assets and income? Many people are somewhat familiar with a prenuptial agreement. Still, many are not aware that it is absolutely appropriate for those who are married to consider an agreement (post-nuptial) regarding important issues such as the ownership of the business or the division of retirement accounts and other substantial assets.
The first step in managing substantial assets in a Louisville divorce is to remember that Kentucky family law establishes an important “fiduciary duty” between spouses that continues until the divorce is finalized. The fiduciary duty requires one to act in the other’s best interest. This includes complete, detailed, and accurate disclosures of all assets, accounts, and debts at the outset of the marriage.
This fiduciary duty also encompasses either party’s actions to hide money or assets, reduce business income to lower valuation prior to the divorce, or any other form of manipulation or secreting of cash or assets. This means every financial transaction, decision, and report in the period before and during your divorce will be evaluated with scrutiny.
Once a determination has been made regarding the nature of any asset or debt (marital vs non-marital), the division of marital property will require accurate valuations of all marital assets. In some cases this will also involve a determination of the amount of marital funds that were used to support an otherwise “non-marital” asset. The valuation of an asset is the first step in property division. Valuation itself can be a highly contentious process, as the parties often have opposing interests in whether the valuation is higher or lower.
Are their liquid assets more appropriately held as secure investments, such as an annuity or even cash value life insurance, to prevent a substantial loss if the asset is exchanged or liquidated as part of the property division process? How will the tax impact of managing substantial holdings in a Louisville divorce impact decisions during property division and even issues such as child support and maintenance or spousal support?
Any attempt to hide an asset or under-report its value will be met with harsh criticism and often financial sanctions by the Court. Remember, it is usually relatively easy for a forensic accounting expert to review account statements, tax returns, and business financials to determine if either party is attempting to manipulate the process.
These cases often involve substantial negotiations and mediation in order to reach an appropriate settlement the Court is willing to accept. This is why it is important to work with the experienced divorce attorneys at Dodd & Dodd. Ask about our ability to handle every aspect of your case, including tax issues, while we protect and advocate for your interests.
It is important to note the Court will review and most often accept any reasonable settlement between you and your spouse.
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. Advance planning is an essential element in a divorce involving substantial assets.
