There are many wealthy residents throughout the Denver and Fort Collins area, and it’s a fact of life that many of those wealthy couples will divorce. For couples that have been married a long time and own many joint assets, those can be difficult to unwind. When going through the divorce process, many important assets, such as art or vacation homes, will need to be divided.
One example of how matters can get complex is the divorce of a retired Microsoft executive and his wife. The couple shared an art collection valued at $102 million that became difficult to divide. Could a well-drafted prenuptial or postnuptial agreement have solved the problem of how to divide the collection?
One expert, who specializes in financial planning for people going through a high-asset divorce, said that postnuptial agreements can be the best tool for a couple to have to make it clear who owns what. Sometimes a prenuptial agreement does not address the possibility of a couple’s new-found wealth, making the postnuptial agreement a necessity.
The expert also recommends caution when wealthy couples think they should just liquidate their assets and split the proceeds equally. Sometimes the tax bill can make that possibility cost prohibitive. For example, if you keep a vacation home that has appreciated in value, you could be hit with a huge capital gains tax bill if you eventually decide to sell it.
The most important thing the expert suggests is to try and remove emotional attachments to certain items when trying to decide who gets what. Thinking about the financial factors will help you get the best deal possible and lead to a more financially secure future.
Source: Forbes, “How To Handle Difficult To Divide Assets,” Jeff Landers, Sept. 18, 2012