Find An Attorney Who Understands Complex Property Division
Guidance through the process of dividing complex assets
Updated: October 16, 2021
Dividing a family’s assets during a divorce can be quite difficult, especially if there are significant assets such as property, retirement plans, stocks, deferred compensation, brokerage accounts, businesses, professional practices, etc. Deciding the value of these assets and how to divide them can be quite a challenge, even in the best situations. While Texas law designating marital properties as “community properties” allows for simpler 50/50 splits in some circumstances, there are still many factors to consider. In contentious divorces this becomes especially complex.
Assets should be carefully analyzed to determine their liquidity, cost basis, and any tax implications tied to their sale. It is not always in your best interest to divide simply based on their current dollar value. You need to understand which assets will be best for your short- and long-term financial security.
As the value of marital property increases, it is even more important for your attorney to analyze all of the divisible assets including:
Any businesses or business property
Deferred compensation packages
Offshore bank accounts
Annuities, pensions & retirement plans
Life insurance policies
Profit sharing plans
Complex tax issues
Real estate holdings
When you are evaluating a divorce attorney for your complex property division, be sure to ask the following key questions:
How will they assist you with the characterization and division of various assets?
It’s important they understand how to evaluate your retirement benefits, private pensions, defined contribution retirement accounts such as 401(k) and 403(b) plans, received benefits through a trust, federal and state employee retirement benefits, and military service member pensions. These are among the common complex assets, but there are many more.
Do they have experience in dividing stock portfolios?
This may include stock options, restricted stock units (RSU’s), stock acquired through employee stock purchase plans (ESPP’s), stock acquired through employee stock ownership plans (ESOP’s), and stock held in stock portfolios.
Have they handled complex division of business assets in a divorce before?
There are unique issues involved in a divorce where the party or parties own a firmly held business or a sole proprietorship. Working alongside financial experts who understand business valuations can provide a more accurate picture for your situation. Learn more about complex asset division on our related post.
The Wrong Decision Could Cost You Far Too Much
Believe it or not, many divorce settlement agreements do not contemplate and address the tax implications of the property divisions they propose. At Capps Law Firm, PLLC, we are highly conscientious about incorporating tax liability into your property settlements to maximize the property settlement benefit. We work directly with CPAs and other tax professionals as necessary to assist our clients in getting and keeping a great deal. We recognize that being knowledgeable about divorce tax is critical to providing full service to our clients.
By not addressing tax issues at the time of your divorce directly, and presuming that taxes are something a good accountant can clean up later, you can end up agreeing to terms where the real value of the property awarded may be significantly different than what one or both parties are expecting. Tax consequences can be significant in a divorce and should be addressed in the context of the overall settlement.
Beyond the above, the cost of any capital gains taxes incurred during and after a divorce could be changing in the near future. As of September 2021, there is a proposal to raise capital gains to 28.8% for some households, which could take effect as soon as 2022. It’s important to seek guidance from your attorney and an accountant on how to anticipate and stay abreast of these changes.
While many people entering the divorce process are focused on the division of assets, it is equally important to understand how debts are divided during divorce. If one or both spouses accumulate debts during the marriage, those debts are most often considered marital. Generally, the debts will be divided equitably, along with the assets.
Business Skill, Tax Experience and a Love Of Math Add up to Success
From a young age, attorney Kelly J. Capps had an affinity for numbers. She holds an undergraduate degree in business administration. In addition to being a business owner, she has considerable experience with the tax implications of dividing pensions and retirement benefits in a divorce. Our team is comfortable with the sophisticated mathematics involved in many divorce cases. This is an important skill to look for in your divorce attorney.
Capps Law Firm, PLLC offers 28+ years of experience in protecting the rights of our clients going through a divorce involving complex property valuation and equitable distribution of significant assets. Our goal is to provide you with the necessary information to make the best decisions possible for your specific financial circumstance during a divorce..
I do not represent that either I, or any employee of Capps Law Firm, PLLC, are experts in the fields of bankruptcy, tax law, real estate law, property appraisals, or other areas of valuation. If necessary, bankruptcy, tax advice, real estate advice, or appraisals are sought from experts in those respective fields. This article does not create an attorney-client relationship. Its purpose is to educate the public about the topic of complex and high asset property division in Texas divorce. This article should not be seen as legal advice. You should consult with an attorney before you rely on this information.