How do Courts Divide Complex Assets in a Divorce?
Untangling how complex assets are valued and determining how to divide that value is one of the most challenging parts of a divorce in North Carolina. Complex assets include businesses, intellectual property, stock options, investment accounts, and retirement accounts. Valuing these assets and creating an inventory is essential to a fair distribution of property. North Carolina is an equitable distribution state when it comes to divorce therefore determining a fair distribution of assets is required.
Unlike in community property states, North Carolina does not divide up the marital assets and debts equally in a divorce. If you are going through a divorce and you have complex assets, you need a skilled Charlotte divorce lawyer on your side. Understanding how courts divide up different types of complex property can help you understand the divorce process in North Carolina.Dividing Up a Business – The Three Most Common Options
Dividing up a business can be one of the most challenging aspects of a divorce. When the divorcing spouses cannot agree on how to divide the business, a court will usually divide the business in one of three ways. The first option is that one spouse takes all of it. A court may decide to award the spouse who was more involved in the business the entire business.
The spouse who does not acquire the business usually receives an asset that is equal in value to the business. For example, let’s say experts place a value of $300,000 on the business, and the couple’s family home is the same value, the judge would award one spouse the business and the other spouse the family home.
A court might also order the divorcing couple to sell the business. After the sale, the couple can split the proceeds equally. North Carolina is not a community property state, however, so the court may not split the proceeds equally. Courts look to multiple factors to determine how to split up property in a divorce. Thus, a court could order the couple to sell the business and give one spouse a larger portion of the proceeds than the other.
In the rare case that both spouses wish to keep owning and running the business, the spouses must agree to continue to operate the business together. In most cases, North Carolina courts do not want to allow couples to continue operating a business together after a divorce. However, when spouses are both vital to the success of the business and the divorce is amicable, courts might allow the spouses to keep working together.Dividing Up Retirement Plans
When a couple has been married for a long time, one or both spouses may have well-funded retirement accounts. Dividing up your hard-earned retirement account can be extremely stressful. For many couples, their retirement nest egg represents their most valuable asset. Many workers contribute to their retirement accounts before they get married and after they get married. North Carolina courts will only divide up assets acquired during the marriage and before the separation. Determining how much of the assets in the retirement accounts are marital property is challenging.
According to CNBC, dividing up a 401(k) and other retirement accounts ranks high on the list of issues couples fight over during the divorce process. The most contentious issues in a divorce are alimony, retirement accounts, and pensions, and the division of business interests. At Arnold & Smith, PLLC we work with accountants and other financial professionals to help our clients determine which assets should be included as marital property. When the division of retirement accounts is not done properly, a divorcing spouse can face steep taxes or penalties. It is important to take a long-term big picture perspective when making large financial transactions that are common during divorce to prevent an unfair or unintended amount of money going to the ex-spouse.The Process of Complex Asset Division
The first step in complex asset division is to create an inventory of assets and value the property correctly. When multiple complex assets are involved, doing so can take a significant amount of time. Often, professional valuation experts and accountants are needed to accurately determine a couple’s assets.
If you are considering divorce and you own significant assets, hiring a skilled lawyer is essential. At Arnold & Smith, PLLC our experienced lawyers have the experience and professional network needed to competently handle your complex divorce. Contact our family law team of lawyers today to learn more about protecting your financial interest in a high-asset, complex divorce case. Our skilled lawyers can help you develop the best legal strategy for your unique situation and will fight for you throughout the entire divorce process.