Divorce can be stressful enough, but in cases where high-value assets may be involved, the stress levels can explode and the effect on the estate plan can be substantial.
Unless you have a pre-nuptial or post-nuptial agreement which would outline the division of assets, and you have assets of higher than average value, a divorce can become uglier than most. The end product may be your estate plan has been totally altered or wrecked.
Are your assets of higher value than average?
Assets to examine when considering divorce are:
- Real estate
- All vehicles, including cars, trucks, motorcycles, boats, etc.
- Stocks and Bonds
- Savings, IRA’s, 401(k)s, etc.
- Insurance plans
- Other items of value
These items are accounted for during the process of Discovery (a crucial part of a high-asset divorce). This is a period of time that both sides will take inventory, interview various parties, appraise and attempt to reveal every last asset that can be divided.
No stone should be left unturned during Discovery, because in order to determine what is fairly yours, you and your spouse need to lay all the cards on the table so to speak. You will also need to claim an account for assets acquired before the marriage began. If properly identified, these assets should come through the divorce process unscathed and retained by you without a claim by your soon-to-be ex-spouse. It’s best to reveal everything so the court does not conclude that you are trying to hide assets, whether they were acquired prior to the marriage or not. There is always the chance that your spouse may try to hide assets during Discovery. There may be off-shore accounts, business assets, and property interests that they will try to keep you from discovering. This is why it may be a wise idea to contact an attorney to consult with before discussing your intentions with your spouse.
Of course, the easiest and best way to avoid this type of ugliness is to create a pre-nuptial or post-nuptial agreement as part of your estate plan from the beginning. You should also periodically review them on a regular basis as life events, including increase in assets, change. However, if you do not have one of these in place, you can get the upper hand and put a post-nuptial agreement in place by consulting with a knowledgeable attorney.