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Costly Mistakes to Avoid in a High Asset DivorceA couple in a high asset divorce has more at stake in the division of property – and more to lose if they make a mistake. A poorly conceived divorce agreement could cost you a small fortune in lost or squandered assets. Once the agreement is approved, you will not get a do-over unless you can prove that your spouse intentionally deceived you during your divorce or you signed the agreement under duress. To avoid having remorse over your high asset divorce, you should do your best to get your agreement right the first time.

Dig Deep

The main way that a high asset divorce is different from other divorces is the number and variety of marital properties. You need to thoroughly investigate your spouse’s finances to see whether there are hidden assets, such as:

  • Undisclosed bank accounts
  • Marital assets within a business
  • Business assets purchased with marital money
  • Secret retirement accounts
  • Secret collections of luxury items
  • Undisclosed real estate
  • Marital assets being loaned to a friend

It is fraudulent for your spouse to hide marital assets if your spouse is actively trying to deceive you. Your spouse might not be at fault if you overlook assets that a reasonable investigation would have discovered.

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Cryptocurrency Difficult to Find, Value During DivorceMarital assets in a divorce can be intangible properties that hold great value, particularly in a high-asset divorce. Cryptocurrencies, such as Bitcoin, are a modern example of an intangible financial asset. Most divorces do not have cryptocurrencies because owners typically must have a combination of technological savvy and individual wealth. The value of one Bitcoin has hovered around $10,000 for the past few months. Owning cryptocurrency can make the division of property more complicated. You may need to hire a financial professional with knowledge of cryptocurrency and how it applies to divorce laws.

Hidden Asset

Cryptocurrencies are a decentralized and unregulated form of digital currency that originated in the past decade. The lack of a central bank or government oversight creates the risk that a divorcee could hide part of their assets by:

  • Using them to purchase cryptocurrency; and
  • Hiding the cryptocurrency in hard-to-find accounts.

You can trace most cryptocurrency transactions through digital records, but doing so may require a forensic accountant with experience investigating digital transactions. A divorcee may be able to cover their tracks by conducting transactions in person and erasing the digital evidence. Finding cryptocurrency during a divorce may continue to be a problem until there are greater regulations on the market.

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Amazon CEO Shows Divorce Can Be Amicable Despite Valuable AssetsAmazon CEO Jeff Bezos recently announced the terms of his divorce from his wife of 25 years, MacKenzie. The divorce is expected to be the most valuable in history because Bezos’s net worth of more than $110 billion makes him the richest man in the world. As part of the divorce:

  • Jeff Bezos will keep 75 percent of the couple’s stock in Amazon and voting control for all of their stock;
  • MacKenzie Bezos’s share will be about four percent of Amazon’s total stock, valued at $35 billion; and
  • Jeff Bezos will receive all of the couple’s interest in the Washington Post and Blue Origin.

As a result of the divorce, MacKenzie Bezos will be the third-richest woman in the world. As astounding as the details of the agreement are, it may be just as impressive that the divorce has been amicable. The couple reached a quick agreement and has complimented each other publicly throughout the process. You could argue that it is easy to cooperate when both spouses are guaranteed to still be amongst the richest people in the world. However, a high asset divorce can just as easily create conflict between the spouses.

The Stakes

You likely worked hard to accumulate the wealth and assets that you share with your spouse. It is natural to want to keep as many of those assets as possible. A divorce is meant to provide financial stability to both spouses. This may mean:

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How to Find and Identify Hidden Assets During Property DivisionEach side during a divorce is responsible for researching their various marital assets to ensure that there is an equitable division of property. However, your spouse may try to gain an advantage by hiding assets from you. Even if the hidden assets are not marital property, they are part of your spouse’s individual wealth after your divorce. A divorce court may award you additional marital properties or greater spousal maintenance if your spouse has significant individual assets. Finding hidden assets may take more effort than the normal discovery process in a divorce.

Where to Look

Suspecting that your spouse has hidden assets does not mean that you know what they are or where they have been hidden. Fortunately, there should be financial records of the purchase or movement of substantial assets. There are several sources that may lead you to hidden assets:

  1. Tax Returns: Your spouse’s federal and state income tax returns must report all of his or her sources of income, including interest from investments and withdrawals from trusts. Looking at the tax deductions may uncover hidden properties that your spouse owns;
  2. Loan Applications: When applying for a loan, your spouse must report all of his or her income, assets, debts, and expenses;
  3. Account History: You can ask for records of all activity from financial accounts that you own jointly with your spouse or that your spouse owns individually; and
  4. Hidden Accounts: You can subpoena a financial institution where you suspect that your spouse has an account, forcing the institution to turn over any records related to your spouse’s account.

When you receive these records, you are looking for activity involving money or assets for which you cannot identify the source.

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Four Reasons You May Need a Forensic Accountant for Your DivorceForensic accountants investigate personal and business financial records and analyze the information that they find. Divorce attorneys often work with forensic accountants in complex and contested cases. You may question whether you need the added expense of a forensic accountant for your divorce, but there are several reasons why hiring one is vital when going through a high-asset divorce:

  1. Your Marital Properties Are Numerous and Diverse: Are you confident that you could name all of your marital assets if someone asked you to? Your spouse may have luxury items, properties, business interests and benefits accounts, some of which you have never seen. Forensic accountants know which properties are common in a high-asset divorce and how to find them.
  2. Differentiating Between Marital and Non-Marital Properties Is Complicated: Claiming that properties are non-marital allows your spouse to exclude them from the division of property. However, a property that only your spouse uses is still a marital property if he or she used marital money to purchase or maintain it. Forensic accountants can track how your spouse paid for a property that he or she claims is non-marital. If it is marital property, then your spouse must compensate you if he or she wants to keep it. 
  3. Expensive Assets Need Accurate Valuation: Your spouse may undervalue his or her income, business, and personal properties in order to gain an advantage in the division of property. You are allowing your spouse to receive more marital property value than you realize without being compensated in return. Misreporting his or her income could also diminish what you receive in child support or spousal maintenance. You need a forensic accountant to independently assess the value of your marital assets.
  4. Your Spouse May Be Hiding Assets: You may have allowed your spouse to handle all of your financial decisions and recordkeeping during your marriage. Your spouse can take advantage of his or her superior knowledge by hiding assets during the division of property. This could include creating secret accounts, misreporting income, or using deceptive practices to artificially decrease the value of his or her business. Forensic accountants know all of these tricks and can identify suspicious information in your spouse’s records.

Contact a St. Charles Divorce Attorney

A knowledgeable forensic accountant may ultimately save you money on your divorce by preventing your spouse from taking advantage of you. A Kane County divorce attorney at Goostree Law Group can recommend a forensic accountant and work with him or her on your case. To schedule a free consultation, call 630-584-4800.

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