FIERCE COMPASSIONATE LAWYERS
${site.data.firmName}${SEMFirmNameAlt}The Law Office of Lisa A. Vance, P.C.
The Path to Your Piece of Mind
Divorce and Family Law Matters

The Law Office of Lisa A. Vance, P.C.
Se Habla Español
210-265-6277
Click Here
Contact
View Our Practice Areas

What if there are financial issues I'm not taking into account in my divorce?

high-net-worth-divorce-surprise-financial-issues-1200.jpg

Working with a number of high-net-worth divorce clients over the years has taught us the importance of bringing financial experts into a divorce. High-net-worth clients have more opportunities to invest and a greater possible range of asset types. When those clients try to negotiate on their own to reach a divorce settlement, they may not understand everything about the assets they have, and may not know how they could or should affect the decree.

We were reminded of the value of a financial professional in a recent Texas Collaborative Divorce blog article from Keith Powell, an Austin-based Certified Divorce Financial Analyst who specializes in working with women who are going through a divorce. In his article, he discusses three overlooked elements of a couple's financial picture that could impact divorce.

The first has to do with term life insurance. As Powell explains:

Because term policies don't have any cash value, I've seen them completely ignored during the divorce settlement and if they are addressed, the decree might say that the insured is 'required' to keep their spouse as the beneficiary. However, a piece of paper that requires someone do something doesn't actually keep them from doing it. The high-income spouse might remarry down the road and five years from now find themselves in an insurance review with their new spouse where they find out the old spouse is still listed as the beneficiary. Forgetting why that was the case, or that they are 'required' to leave it that way, they change the beneficiary, and nobody finds about it until policy holder passes away.

Powell also identifies tax issues associated with 401k accounts. He compares a house with $200,000 of equity with a 401k account worth $200,000. The income taxes associated with 401k withdrawals means that they don't function in the same way that other assets do, and that should be factored into the asset distribution process in a divorce. However, for couples negotiating one themselves, this might not even register as an issue - they might just look at the $200k values for each assets and regard them as equal.

He also looks at the value of a pension. Depending on when a person started work, some of the pension might be separate property and some of it might be community property. Also, as he notes:

Every participant who is enrolled in a pension gets a statement showing them what dollar amount they could access if they cashed in their pension. This dollar value is NOT the value of the pension. It's simply their walk-away value. A professional pension valuation would need to be done in order to calculate what the actual value, in today's dollars, is.

Powell writes from a collaborative perspective, and we can extol collaborative law's virtues in help high-net-worth divorce couples come to creative solutions in dividing large and complex estates.

A high-net-worth individual does need to be prepared for litigation, though, in case a divorce case goes down that route. And it's definitely possible for those cases to enter some sort of negotiation to avoid the courtroom. But having both a lawyer and a financial professional with divorce experience will help you gather all the knowledge you need about your estate, and better determine how to best divide it.

No Comments

Leave a comment
Comment Information
Lisa A. Vance Awards and Recognition.

Call Us – We Can Help

Call Today At 210-265-6277 Or Email To Schedule A Confidential Consultation.
Spanish translation services are available upon request.

See All Our Videos

We have a lot of information on our website. Please use the search bar like a library. Put in your main topic and find articles to help with your issue.

Request A Consultation

The Law Office of Lisa A. Vance, P.C.
814 North Alamo Street
Suite 1
San Antonio, TX 78215

Phone: 210-265-6277
Fax: 210-582-5878
San Antonio Office Map

Request A Consultation

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy