Seeking to Achieve Client Property Division Objectives in a Tax-Advantaged Manner

A significant aspect of almost all divorces is the division of assets and allocation of debt.  Our practice is focused on identifying all marital assets and debt, determining what assets are of most interest to our client, and then seeking to achieve our client’s objectives in a tax-advantaged manner through negotiation.

Determining the Proper Valuation of Assets and Tax Consequences

law books - 0H8A0540Asset division can be a difficult issue, particularly when closely held businesses, professional practices, and contingent financial assets are involved.  While homes, cars, and other physical assets can usually be valued within a relatively small range, many business assets (such as a physician’s practice) and contingent financial assets (such as stock options) are more difficult to value.

We work with CPAs, business valuation experts, and others in determining the fair market value of business and financial assets.  Often there may be significant differences in valuation; we seek to use that valuation methodology that we believe will be the most likely to be accepted by the court if a trial is necessary.

In a settlement, it’s important to understand that tax ramifications may be impacted upon an asset transfer.  In a property settlement, we advise clients of the tax ramifications, and seek to develop tax-advantaged solutions that will benefit our clients to the extent that such solutions are available.

Liability Allocation

Many assets, such as a house, will have associated liability obligations (like a mortgage).  In working with a client in property division, we will want to carefully consider the marital debt, and, where possible, determining a plan for reducing or eliminating debt to the extent possible.