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Understanding the complex elements of property division

| Jul 15, 2021 | Divorce |

The division of assets is a crucial component of the divorce process. It is also one of the most complicated elements. You must divide all your property and liabilities equitably according to state laws. Keep in mind that equitable distribution does not always result in equal division.

Defining a fair arrangement in high net worth divorces presents additional difficulty, as marital assets may be subject to different laws and tax regulations.

Elements of a complex dissolution

Some common reasons for increased complexity in divorce cases include:

Valuation of assets

Determining the worth of assets, such as businesses, investments and real estate, can be a source of contention in a divorce. A variety of factors can complicate the valuation process. For example:

  • Will businesses remain operational in the agreement?
  • Are the assets of companies liquid?
  • Will there be tax ramifications to the division arrangement?

Marital property and separate property

It is essential to resolve which assets are marital property and which are separate. Separate property refers to assets acquired before the marriage. Both types of holdings must go through a valuation process to have an accurate accounting for each person.

Hidden assets

Sometimes, spouses try to hide valuable assets like stocks, retirement assets and offshore bank accounts. Other times, they may overlook assets when listing belongings.

Validity of nuptial agreements

If you prepared a prenuptial or postnuptial agreement with your spouse, it could streamline the property division process. However, your spouse may dispute the validity, depending on the circumstances of the arrangement.

The valuation, separation and equitable determination of assets is an intricate and involved procedure. It is crucial to ensure a careful process, as oversimplifying the distribution can result in unfair settlements.

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