When an Arizona couple has been fortunate enough to amass a considerable volume of wealth, the process of dividing those assets during divorce can become complicated. Spouses who are involved in a high asset divorce often make the mistake of focusing only on certain elements of the divorce, as opposed to viewing the process as a whole. Ending a marriage involves a multitude of decisions, some small and some large. Understanding how these decisions shape the final outcome is essential.
For example, many divorcing spouses focus primarily on spousal support, and work to negotiate a payment system that yields the highest reward. Some will even negotiate for a higher level of alimony in return for a lower share in certain other assets, or for lower child support payments. However, it is important to realize that alimony is taxable, while child support is not. On the flip side, for the individual tasked with making these payments, alimony can be tax deductible, whereas child support is not. Therefore, each spouse will have his or her own set of needs when it comes to determining how these payments will be structured.
Another issue that spouses often struggle with is negotiating the division of the family home and retirement savings. It is not uncommon for one spouse to aggressively strive to keep the family home, only to let retirement funds go to the other party. Depending on the overall financial outlook, this could leave the spouse who retains the house at a distinct financial disadvantage when the time comes to sell the property. Such a strategy could also leave one spouse lacking adequate funds to retire comfortably in his or her later years.
Every Arizona spouse will have a unique set of needs and goals when it comes to a high asset divorce. Understanding how various aspects of a divorce settlement supports those needs and goals is crucial to obtaining a positive outcome. Within divorce, it is imperative to take a holistic view, one that incorporates all of the various decisions involved. Doing so can lead to a division of assets that is both fair and favorable.
By: Thomas Wilson of The Law Office of Thomas Wilson PC posted in High Asset Divorce on Thursday, March 19, 2015.