High-Asset Divorce in San Luis Obispo, CA

How to Handle the Challenges of Wealth and Divorce

Divorce is never easy, but dealing with a high-asset divorce in San Luis Obispo, CA, brings challenges, so having an experienced family law attorney by your side is essential. At 805 Law Group, we have helped numerous clients protect their financial interests and resolve high-asset divorce cases.

Our legal team brings a depth of understanding to California divorce law, mainly when sizeable assets come into play.

Contact us today, and we’ll provide the personalized legal assistance you need!

Understanding High-Asset Divorce

High-asset divorces aren’t just regular divorces with more zeros on the end. They come with their own set of specific concerns and requirements. If you’re facing a high-asset divorce in San Luis Obispo, CA, understanding what’s involved can better prepare you for the journey ahead.

Definition of High-Asset Divorce

High-asset divorces involve higher incomes and more complex assets—real estate holdings, business ownerships, or extensive investment portfolios. Even things like retirement accounts, valuable art, or rare collectibles can complicate the divorce process. Unlike simpler divorce cases, high-asset divorces require a detailed inventory and valuation of these assets for a fair distribution.

Common Issues in High-Asset Divorce Cases

In high-asset divorces, the stakes are raised, and disagreements often extend beyond who gets the house or car. Here, you might encounter disputes over the market value of a family business or the division of sophisticated financial investments. Spousal support and child custody can become even more contentious issues, as the lifestyle the family is accustomed to might require substantial amounts of money. Debts, too, can be a point of contention, especially if they are tied to a business or high-value property.

California Laws on Property Division in Divorce

California operates under “community property” laws when it comes to divorce. This means that all assets and debts acquired during the marriage, with some exceptions, are considered community property and are usually split equally between the two parties during a divorce.

• Community vs. Separate Property: While most assets acquired during the marriage are considered community property, there are exceptions. Assets owned before the wedding, gifts or inheritances specifically to one spouse during the wedding and assets acquired after separation usually are considered separate property. Separate property remains with the original owner.
• Valuation of Assets: They need to be valued appropriately before dividing assets. This is especially significant in high-asset divorces where there might be businesses, real estate, or other valuable items. Sometimes, a professional appraiser or accountant may be needed to determine the accurate value.
• Debts and Liabilities: Just as assets are divided, so are debts. All liabilities incurred during the marriage are split, regardless of whose name is on the debt. However, debts acquired before marriage or after separation remain the responsibility of the individual spouse. Unfortunately, determining the exact date of separation is not always easy. In some instances, courts may conduct a trial solely to establish the date of separation before the judge proceeds with the case.
• Agreements and Mediation: While the law stipulates an equal division, spouses can come to their own understandings through mediation or prenuptial/postnuptial agreements. Such arrangements can sometimes be more flexible than the strict 50/50 division the law requires.

Child Support

In high-asset divorce cases, child support can become a complicated issue. While the intent of child support is to maintain the standard of living for the child, the presence of significant assets or high income can give rise to unique considerations.

• Calculating Child Support: California uses a formula to calculate child support, factoring in parents’ income, the amount of time the child spends with each parent and other variables. However, in high-asset cases, additional resources like trusts for the child, educational expenses, or specialized care needs can change the regular calculations.
• Standard of Living: The court considers the standard of living the child is accustomed to when determining child support payments. In high-asset families, this standard may include private schools, extracurricular activities, or even personal caregivers—factors that could lead to higher child support payments.
• Tax Implications: Given that high-asset divorces often involve more complicated financial portfolios, tax consequences related to child support need to be carefully assessed. For instance, the parent who pays child support cannot deduct it from their income for tax purposes, while the receiving parent doesn’t have to report it as income.
• Changes and Modifications: In high-asset scenarios, child support agreements might require more frequent revisiting due to fluctuations in assets or income. Any significant change in either parent’s financial circumstances could be grounds for modifying the child support order.

Spousal Support 

Spousal support, also known as alimony, is a contentious issue in divorce cases. In high-asset divorces, the determination and calculation of spousal support can be even more complicated due to the substantial financial resources in play.

Determining Spousal Support

In California, spousal support is determined based on factors like the length of the marriage, each spouse’s financial and non-financial contributions, and the lifestyle established during the marriage. Given the high-value assets and potentially significant incomes involved in high-asset divorces, the lifestyle factor can considerably influence the amount and duration of support.

Temporary vs. Permanent Support 

High-asset divorces often come with longer legal processes due to the complexities involved. During this time, temporary spousal support might be granted to maintain the standard of living for the lower-earning spouse. Once the divorce is finalized, the court might issue a different, longer-term (or permanent) support order, considering the entire couple’s assets and circumstances.

Tax Considerations

The tax implications of spousal support can vary based on when your spousal support order or judgment was completed and whether you’re considering state or federal taxes.

For orders or judgments completed on or after January 1, 2019:

• Federal Income Taxes: The payer cannot deduct spousal support payments; the recipient doesn’t need to report the payments as income.
• State Income Taxes: Unlike federal laws, for California taxes, the person paying the support can deduct the payments, while the recipient must report these payments as income.

For orders or judgments completed before December 31, 2018:

• Both on the federal and state levels in California, the person paying support can deduct the payments, and the recipient has to report them as income.

Prenuptial Agreements 

Especially common in high-asset marriages, prenuptial agreements might dictate the terms of spousal support. If an agreement is in place, the court usually respects its terms as long as they’re considered fair and were entered into without coercion.

Steps to Navigate a High-Asset Divorce in San Luis Obispo, CA

High-asset divorces come with their unique set of challenges. Here in San Luis Obispo, CA, being prepared and knowing what steps to take can make a substantial difference in the outcome of your divorce.

1. Identify and Inventory Assets: One of the first tasks is to inventory all assets, including properties, investments, and valuable possessions like art or antiques. Ensure to include all assets, not just those in California but also elsewhere.
2. Value Your Assets: Knowing the worth of your assets is crucial, particularly in high-asset divorces. This may require getting professional valuations for things like businesses or unique pieces of property.
3. Document and Gather Records: Compiling financial records and documentation will support your case. This includes bank statements, tax returns, and shared or individual debt documentation.
4. Consult Financial Advisors: Given that high-asset divorces often involve multiple types of assets and possible tax implications, consulting with a financial advisor can help you grasp the long-term impact of asset division.

If you’re facing a high-asset divorce in San Luis Obispo, CA, it’s wise to remember these are just the basics. Each divorce case is unique and may require tailored legal advice.

How Can a High-Asset Divorce Attorney Help Me?

When facing a high-asset divorce, it can feel like you’re sailing into choppy waters, especially with significant resources at stake. So, what can a high-asset divorce attorney do for you? Let’s break it down:

• Asset Identification and Valuation: Assets in such divorces often include more than just your bank accounts. Your attorney can spotlight overlooked assets like intellectual properties, stocks, overseas funds, or royalties. They can also connect you with forensic accountants or valuation experts to know the accurate value of more complex assets like businesses or luxury items.
• Strategic Planning: There’s a strategy involved in determining which assets to fight for. For instance, while real estate may appreciate, certain stocks offer better liquidity. Your attorney can help you discern which assets align with your future financial goals and which might become liabilities.
• Contract Interpretation: Prenuptial or postnuptial agreements can contain complicated clauses, some of which may work in your favor or against. Your attorney can not only clarify these clauses but might also challenge any unfair provisions, ensuring they don’t unjustly affect your divorce outcome.
• Skilled Negotiation: In high-asset divorces, there’s often more than just money at stake. It’s about the legacy, the brand, or even a shared business. With extensive knowledge of the local San Luis Obispo, CA laws, your divorce attorney can push for settlements that respect your contributions to the marriage, ensuring you’re fairly represented in asset division or custody arrangements.

Contact Our High-Asset Divorce Attorney

If you’re navigating a high-asset divorce in San Luis Obispo, CA, having experienced legal guidance is crucial. At 805 Law Group, we stand ready to support you every step of the way, ensuring you’re equipped to make informed decisions.

Beyond divorces, we’re experienced in other vital areas of law. If you’ve been injured, our legal team in personal injury law is committed to advocating for your rights. Facing criminal charges? Our criminal defense lawyers ensure a solid defense strategy. As you contemplate the future, we offer reliable advice in estate planning to help you leave a lasting legacy.

Don’t face these challenges alone. Reach out to 805 Law Group today, and let us be your ally in these difficult times.