How to avoid problems in high-value divorce cases

How to avoid problems in high-value divorce cases

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When entering a high-value divorce case, there is no reason to go into negotiations alone. Not only can unanticipated costs add up, but you might not be aware of all the money or property that is rightfully yours.

There are reasons to be careful in Colorado:

  • Colorado is an equitable distribution state. That means that marital property is to be divided in a fair but not necessarily equal way.


  • Property brought into the marriage remains with that partner. Property acquired after the marriage is to be divvied up. However, if property brought into the marriage increased in value, then that increase is part of the marriage and can be parceled out during the divorce.
  • When determining fair division, factors such as age, income, contribution to the marriage including as a homemaker and more are considered.
  • Retirement accounts such as a 401(k) or pension – if they were created or increased in value during the marriage – are subject to division in the divorce. Social Security benefits, however, are not subject to division.
  • You can avoid paying taxes on property if it can be divvied up without being sold. However, if property must be sold to make an equitable distribution, then you not only face paying taxes on the sale, you will also pay transaction costs and may not get what you think your property is worth if you enter a suboptimal sales market.

Hire a forensic accountant

Trust is often in short supply during divorce cases. Some people hire a forensic accountant to provide a complete picture of all the assets involved in a divorce.

By combing through documents like tax returns, financial statements, canceled checks, bank statements, mortgage applications, appointment books and sales invoices, a forensic accountant can help you:

  • Search for hidden assets or income
  • Find inconsistencies between documents such as personal and business expenses
  • Conduct a business valuation and calculate cash flow
  • Help your attorney with divorce documents and prepare for any deposition
  • Provide input during the settlement process.

It’s important to look after your finances during a divorce. Not only does the divorced couple have two households to maintain, but the tax break for married couples goes away and any line of credit a bank might offer is often reduced.