How Are High-Value Assets Distributed in Pennsylvania?
Although you might expect to split property with your spouse 50/50, this is not the case. Pennsylvania law states that property must be divided under the notion of equitable distribution. Equitable doesn't necessarily mean equal. That means that the breadwinner doesn't always get more. The court's goal is to ensure both parties will be in the same or similar financial position as though they remained married.
What is Marital Property & Non-Marital Property?
There are two types of property divided during a high-asset divorce: marital property and non-marital property.
Marital property is defined as any property you acquire with your spouse during your marriage, including any increase in value of property that may otherwise be deemed non-marital. Examples of this could be a house, bank accounts, retirement accounts, businesses, stock, stock options, cars, or furniture. The court will consider the length of the marriage, the standard of living, a spouse's age and income, and many other factors when dividing marital property.
Non-marital property is anything you or your spouse acquired before you were married. Non-marital property also includes any gifts or inheritances received from third parties (not your spouse) or property that you and your spouse agreed to not include as marital property in a prenuptial or postnuptial agreement.
Important note on non-marital property: Although property acquired before marriage is considered non-marital property, it is included as marital property if it increases in value during the marriage.
What is Divided in High-Asset Divorces?
Your marital property breaks down into several types of assets that must be divided during your divorce.
Consider the following assets and how they are divided in your high-asset divorce:
When dividing retirement funds, there are a few things to consider. Since Pennsylvania distributes assets equitably, even a stay-at-home spouse has a right to the higher-income earner's retirement fund. The court will consider issues like this when they make their final decision.
Remember, premarital assets are not subject to division in a divorce. That means that your spouse does not have a right to the portion of your retirement acquired before your marriage or after your final separation.
The value of a business is addressed and distributed based on each spouse's role in building and sustaining it. Additionally, the non-business owner may only be entitled to the portion of the business that increased during the marriage if the company was started before the marriage. Typically, one spouse keeps the business, and assets are offered to the other spouse to offset the value of their portion of the business.
Real Estate Assets
Real estate assets can include the home (or homes) you and your spouse lived in or investment properties you acquired during your marriage. When deciding who keeps the house, the court considers which parties can afford the home, the children's best interest, who will serve as the primary custodian, specific custody arrangements, and other factors.
Additionally, other marital property could be offered to the spouse who doesn't get the house to ensure a fair distribution. If both parties can afford the home and it's in the children's best interest, the court might order the home to be sold.
Real estate investments like rental properties will be divided like any other asset. You have options including continuing to rent out the property with your ex, selling the properties and distributing the money, or buying out your spouse.
You or your spouse may have received stock options during your employment. These stock options are considered marital property in Pennsylvania. When a spouse acquires stock options during their marriage and collects a profit from them, the other spouse may be entitled to a portion of the earnings.
Assigning an accurate valuation to stock options is complex. Forensic accountants can be hired to assess the stock's value and distribute it fairly.
How Is Spousal & Child Support Determined?
When high-earning couples get divorced, the court must determine the amount of support owed between both parties based primarily on their income. Your case may require forensic accountants to determine your net income to assign the amount of child and spousal support you're responsible for.
It's also important to note that just because your ex earns more doesn't mean they have an advantage in custody agreements. Although income impacts the amount of support each party pays, it won't be considered when determining child custody. Lower earning spouses don't need to worry about their higher-earning ex's using their money to influence any court decision in a high-asset divorce.
What if My Spouse Is Hiding Assets?
Couples may have accumulated certain assets that one spouse is unwilling to give up. Failing to disclose all your financial information can impact the judge's decision and damage your case. If you notice money missing from your joint bank account or your spouse avoids disclosing their financial information, they may be attempting to hide their assets.
Provide any information you can to your high asset divorce lawyer. They will uncover any deceptive tactics your spouse uses to hide funds or other assets.
How Can I Prepare for My High-Asset Divorce?
To ensure a smooth transition into your new life, you must cooperate in your case. Producing requested documentation and quickly untangling your finances can result in a much easier high-asset divorce process. Additionally, be sure to note the date of your separation — doing so can help you keep assets acquired before and after your marriage.
It might be tempting to fight over every decision in your case; however, your high-asset divorce attorney is there to protect your rights and make this process as painless as possible to save you both time and money.
Contact a High Asset Divorce Lawyer Today
High-asset divorce cases can be time-consuming and expensive. Avoid adding unnecessary stress by recruiting the help of a high asset divorce attorney at Gibson Family Law, PLLC, like Susan Gibson. She will highlight issues in your case, clearly explain the process, and help you achieve your goals.