What assets are untouchable in a high net worth divorce?

Separate property acquired before marriage is not typically split up in a high net worth divorce. This includes gifts, inheritances, trust funds, or even real estate, but some exceptions can enter into force and turn such assets into marital property.

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Every divorce comes with its own complications and obstacles, but high net worth divorces are generally much more complex because of the assets involved.

Therefore, it is essential to understand what assets are not subject to division and that you need to protect.

Courts recognize that parting spouses may own some property that is separate from what they accumulated as a marital couple, which is generally excluded from a high net worth divorce resolution. When dividing property, it is necessary to identify, value, and properly categorize the assets as:

  • separate property - the court evaluates where the property is derived to determine its owner. Premarital property, gifts, and inheritances are usually excluded from division.
  • community property - all assets earned or acquired during the marriage are presumed to be community property.

Premarital or separate property and exceptions - assets acquired before marriage

The property that a spouse brings into the marriage is usually untouchable; however, the circumstances can change if the old property has become commingled with marital property (when the other spouse contributes to increasing its value):

  • Gifts and inheritances received during marriage - while a personal gift or inheritance might be considered separate property, there is also a burden of proof involved, requiring the receiving spouse to provide a deed of exclusive ownership. When money from a gift or inheritance is added to a joint savings account, it could become marital property.
  • Trusts and trust funds - trusts created before marriage can shelter the separate property, defining the related income as untouchable. However, when a spouse is awarded the possessory right to any part of the trust, the income can be deemed community property.
  • Real estate property acquired before marriage - if a spouse owns a house before marriage and the title is changed to list the other spouse afterward, it may become marital property (for instance, if it was renovated by using common funds).

Assets in a high net worth divorce that are considered separate property can turn out to be marital property, and proving ownership is a challenging task. The Law Offices of Sean M. Cleary has the expertise to determine separate vs. marital property and protect your rights and the assets you brought to your marriage.

Disclaimer: Please note that the information provided on this site is not formal legal advice, also the site does not allow you to form an attorney-client relationship.