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High-End Divorce and Tax Implications in Bucks County Divorce Cases
There are various factors that complicate a high-end divorce for divorcing couples in Doylestown and Newtown. When spouses have a high net worth, own a business, or own significant assets, it is important to approach property division carefully and accurately. It is also important to mention that with many couples, one spouse has significant assets tied to his or her career. In many cases, a complete financial analysis may require that career assets be considered in arriving to an equitable settlement.
Guidance from Our Skilled and Knowledgeable High-End Divorce Lawyers
We sincerely care about our clients and want to ensure their financial interests are protected. Our attorneys make sure that a full and complete inventory of all assets of the clients is prepared, including cash, checking accounts, savings and money-market accounts, Children’s Bank Accounts, retirement accounts, non-retirement investment accounts, deferred pay-raises or bonuses, etc. No stone is left unturned.
Since it is a well known fact that assets have tendency to disappear once the divorce proceedings have commenced, it is vital that an attorney working with a high net worth client have knowledge of finance and tax laws in addition to legal knowledge in order to be able to discover hidden assets, present a full and complete financial picture of the couple and most importantly, address concerns such as future payments of alimony, “maintenance” of the lifestyle a non-working spouse is accustomed to, disparity of income and others. Our own experience illustrates that financial planning is a means of reaching a more equitable divorce settlement. In essence, analyzing the marriage as if it were a financial contract when it comes to division of property makes it possible to achieve best possible results for our clients.
How Will Divorce Affect My Taxes?
Divorce will have a tax impact, but it is not clear to what extent each individual will be affected. In some cases, property values can actually increase with proper planning in divorce. In most cases, receiving spouses are taxed on spousal support but not on child support. Property transferred from one spouse to another may be considered taxable under certain circumstances and, of course, there are very specific tax laws when it comes to tax treatment of US bonds, annuities, Life Insurance and sale of the principal residence. Other important tax questions arise in conjunction with retirement plans. Our attorneys always think ahead when it comes to these fundamental issues so the impact of taxation during the equitable distribution process is analyzed and predicted with complete accuracy.
How Does a High-End Divorce Differ?
Most divorces require spouses to address property division, alimony, child support, and related issues. While a high-end or high-income divorce is similar to a common divorce, we are very aware that the value of assets is much higher and therefore, substantially more expertise is required to assess a proper settlement. Individuals or couples who own a business, significant property, or who are considered high net worth individuals should work with an attorney who is mindful of a client’s assets and financial obligations, liabilities and tax complications, but most importantly, the attorney must have both legal, financial and tax laws knowledge and expertise in order to be able to fulfill his or her obligations to the client in protecting the assets to the extent allowed by law. Firm partner, Kevin Zlock, possesses the skill and knowledge necessary to help clients going through a high-end divorce.
How the New Tax Cuts and Jobs Act (TCJA) Affects Your Divorce in Pennsylvania
If you are currently in the process of getting a divorce in Pennsylvania, the new tax law may have a significant impact on your divorce. To find out how your personal situation may be affected, please refer to the article New Tax Reform – Impact on Bucks County, Pennsylvania Divorces, by Brett Dubin, CPA. We always collaborate with tax and financial advisors, business valuators, and/or forensic accountants while working on high assets divorces in Bucks County, Pennsylvania.