When to Liquidate Assets During a High Net Worth Divorce
Deciding whether or not to liquidate your assets during a high net worth divorce can be extremely difficult for spouses. There are many pros and cons for liquidating your assets in a high net worth divorce, although many financial experts see this move as a last resort. Knowing when to liquidate your assets and when to “trade” certain assets is important if you want to walk away from your marriage in the best position for your future as possible.
In order to approach this challenging situation in an effective manner, it is best to reach out to a qualified, experienced divorce attorney in Mecklenburg County or the surrounding areas. When you are dealing with extremely high-value assets, you need to get help from an attorney who thoroughly understands the unique concerns associated with a high net worth divorce. With a competent legal professional by your side, you can tackle every specific hurdle that may arise during your separation, including child support, alimony, and the equitable distribution of property with confidence.Why Do Spouses Choose to Liquidate Their Assets?
Spouses may choose to liquidate their assets for a number of reasons. In many cases, this is seen as a last resort. When spouses cannot seem to come to an agreement about certain assets, the only remaining option may be to liquidate the asset and then split the proceeds in a 50-50 manner, or some other equitable way that is in line with the overall equitable distribution. While this may not always be the most profitable solution, it serves to speed up and simplify the negotiation process and help everyone move on to the next stage of the divorce proceedings.
Freedom of responsibility is another notable reason for many spouses who choose to liquidate certain assets. In some cases, continued ownership of the asset may force the retaining spouse to interact with their former spouse as they carry out various tasks associated with the asset’s management. In other situations, it may simply be too costly for one spouse to own an asset. One spouse may be well-positioned to handle taxes and costs associated with upkeep and maintenance, while another spouse may have the funds to cover these expenses. One spouse may want to liquidate the asset to free themselves of these responsibilities.The Divorce Court Must Oversee the Liquidation of Assets
You should never liquidate your marital assets without permission from your spouse. If divorce proceedings are already underway, it is advisable to liquidate assets only after a through discussion with your legal counsel and an understanding of the potential consequences..Watch Out for Tax Consequences
As most financial experts will tell you, there is a significant downside when it comes to liquidating assets. You will likely face significant tax consequences for selling assets, especially if they are worth considerable sums. In many cases, spouses may struggle to handle these tax consequences. This is why it is very important to accurately assess the post-tax value of the assets that you want to liquidate. Liquidating assets may seem like a profitable choice at first, but you may be sorely disappointed when you realize how much money you will pay in taxes.So… Should I Liquidate Assets During a High Net Worth Divorce?
As previously noted, liquidating assets during a divorce is typically seen as a last resort. That being said, there are certain situations in which this may be a preferable course of action. In the end, it all comes down to your unique goals and priorities. As long as you are aware of the potential consequences of liquidating your assets, you should make the decision that you think is best. With all that being said, it is worth mentioning that “trading” assets does not trigger taxable actions. This means that this practice is likely preferable to liquidating assets in the long run.Enlist Help from a Qualified Divorce Attorney
If you have been looking for a divorce attorney in the Charlotte area who can help you with the unique challenges of a high net worth divorce, call Arnold & Smith, PLLC today. Our firm has a wealth of experience with high net worth divorces in North Carolina, and we have helped numerous divorcing spouses reach favorable outcomes in their divorce proceedings. We can guide you through every aspect of your divorce in a clear, concise manner. Contact us to schedule your consultation today and we can help you dissolve your marriage in the most confident way possible.