News outlets were flooded on Tuesday with the news that Angelina Jolie had filed for divorce from Brad Pitt, her husband of two years and partner of nearly 12. With six children, numerous international properties, and an estimated $400 million joint net worth, “Brangelina’s” divorce is likely to be more complicated than most. Even without the harsh media spotlight, divorce is almost always a devastating, challenging ordeal. Apart from the emotional aspects, dissolving a marriage is also a legal matter. It involves the division of properties and assets, along with decisions about the care and welfare of children.
As a comprehensive wealth manager involved in all aspects of our clients’ lives, Balentine has helped several clients navigate this painful process. While we can never take away the pain associated with divorce, these five steps can help ease some of the stress faced by individuals considering one.
- Hire a family law attorney. Even the most amicable divorces can turn bitter, and it is typically safer to err on the side of caution. Also remember that divorce is a legal process, so it is wise to have counsel to help you navigate.
- Understand the full balance sheet. Know all your assets, liquid and illiquid, and understand how entities work. Legal structures (e.g. LLCs v. LLLP v. Trusts) and titling can significantly impact the division of assets. Also be sure you understand the tax implications of a settlement. Many couples often overlook the eventual capital gains tax on low-basis assets.
- If you have a closely-held business, ensure that there is an updated valuation on the company. If not, demand one.
- Talk to your children, and, if necessary (err on it being necessary), hire a child psychologist.
- Seek your own counsel. Many times we see one spouse handling all financial aspects of a marriage, which often carries over into the divorce. The other spouse, potentially not as well versed in this area, may not know whom to contact for help. By hiring your own accountant or estate planning attorney, you can ensure that you will have someone to advocate in favor of your best interests.
Divorce is never pleasant – for any party involved. By following these five steps if and when the time comes to file, you will be prepared. Balentine has helped clients navigate the process and can refer experts in each of the five areas.
Also keep in mind that if child support or alimony is involved, divorce settlements are never truly “final.” Changing monetary circumstances can result in changing interpersonal circumstances, and even people with amicable post-divorce relationships can have very differing views on what is equitable financially.
If you have any questions related to divorce and finances, please contact us today.