Divorce is never an easy process. The emotions involved can be overwhelming, while at the same time you’re dealing with issues you never before considered. For couples with a high net worth, things can be even more complicated. Asset tracing is a means of making those complexities easier to handle.
Property division and equitable distribution
At the commencement of any divorce, property division is one of the issues a court must tackle. For high-asset couples, this can be much more difficult than most divorces. Their assets are often more varied and unusual, consisting of things like business interests, stock options, inheritances and multiple pieces of property.
The court must first identify and classify all of the couple’s assets. If an asset is considered separate property, it will likely remain with the spouse who owns it. If it’s classified as marital property, it will be subject to the doctrine of equitable distribution – meaning the court will seek to divide all marital property fairly (rather than equally) between the spouses.
Because of the complexity of a high-asset couple’s portfolio, asset tracing can be a critical component of the process. Asset tracing investigates the history of the couple’s property, ensuring that everything is properly identified. It then follows the history of the assets to clarify each spouse’s contribution. Once asset tracing is complete, you can be more confident that everything has been properly classified as either separate or marital property. This clarity makes it easier to accept the subsequent property distribution, so that you move on in a healthy way, rather than second-guessing the final divorce decree.