During a marriage, many couples amass a significant amount of assets. This is especially true for high net worth couples. Divisions of these assets can be a critical part of a divorce. In order to ensure that assets are divided appropriately, a thorough analysis of the assets of the couple, and the assets of each spouse, must be made… ideally by an experienced attorney.
Negotiations regarding division of assets can be particularly contentious for high net worth individuals, as there is quite simply a lot at stake. Because of this, it is helpful to retain an attorney to assist you through this process.
Georgia is an equitable distribution state. This means that assets are not necessarily divided equally; rather, they are divided based upon the financial circumstances of each spouse and the principal of fairness. Thus, there is no set formula or calculation. Division of assets is closely tied to allocation of debts, as well.
Parties can agree to a division of assets between themselves. If a couple cannot so agree, a judge or jury will determine the division of assets. He or she will examine factors including the earning capacity of each spouse, the contribution of each spouse to any particular asset, the length of the marriage, and whether any children are involved. For example, if there are children, the marital home will typically be awarded to the spouse having primary physical custody. Depending upon whether the home is subject to a mortgage, the judge may award the other spouse a more sizeable portion of other assets, such as bank accounts.
What Is Subject to Division?
Assets are classified as either marital, and subject to division, or non-marital, and not subject to division. Marital assets generally include all assets that a couple acquired in contemplation of or during the marriage. Such assets include income, vehicles, the marital home, investment accounts, and household furnishings.
Regardless of whether it was acquired during the marriage, certain assets are non-marital. These include inheritances and gifts. Likewise, assets that were owned by one spouse prior to the marriage are normally considered non-marital assets.
However, if non-marital assets have been used to purchase marital assets, such as a house, or otherwise commingled with marital assets, the determination is more convoluted. In such an instance, an examination of the nature of the purchase or commingling and the contribution of each spouse after the purchase or commingling, along with the division of other assets and allocation of liabilities, will be necessary.
Individuals with high net worth often have significant amounts invested in retirement accounts. Depending upon whether these accounts were established prior to or during the marriage and the contribution of each spouse to the marriage, retirement accounts are subject to division. This is true regardless of the nature of the retirement account—for example, a self-directed IRA or a pension plan.
This is also true if only one spouse contributed financially to the marriage, but the other spouse contributed to the marriage in other ways, such as caring for the home and children. Division of assets involving retirement accounts must be done in a very specific manner to ensure that the administrators of the plan adhere to the terms of the division instructions
Attorney David McLeod has over two decades of experience representing individuals in divorces, and he can help you understand the assets to which you are entitled. If you have questions about the divisions of assets, or would like to set up an initial consultation, the McLeod Law Firm, P.C., can be reached at (770) 536-0202.