Divorce can be a difficult time for many couples. This can be true especially in cases where property division involves substantial assets. Couples with a large number of assets, particularly illiquid assets such as hedge funds or interest in a business, may find it difficult to equitably divide their interests.
A lot of assets are difficult to divide when a divorce occurs because their value may be subject to change over time. In a recent article, a financial planner cited one example involving a couple that had joint interest in a company. He suggested that the couple divide the shares between them rather than allowing a judge to make a ruling, claiming that the judge would have asked the husband to make payments to the wife. The latter arrangement might be unequitable in the long run because it exposes the payer’s income to market conditions while shielding the person receiving the payments from risk.
Hiding assets is another problem that may occur during property division proceedings. Things that may seem like an innocent transaction, such as making an interest-free loan to a family member, could actually be an attempt to hide money from a spouse. Those funds may be returned after the divorce is finalized, allowing them to avoid division.
These issues are only a few of the difficulties a person may face when they become involved in divorce proceedings. In order to protect one’s interests during the property division process, some people may work with a divorce attorney who might represent a client during negotiations with the other party and before a judge in court.
Source: Financial Planning, “Finding Hidden Assets: Digging Deep in HNW Divorce”, Andrew Pavia, March 24, 2014