What is a Complex Asset in a California Divorce?
As spouses approach divorce in California, they may encounter many new terms. One of these terms might be “complex asset,” and it is a concept worth exploring in greater detail. As the name suggests, complex assets may be difficult to divide, assess, locate, or value during a divorce. But what exactly is a complex asset in California? Like the name itself, the definition is slightly complicated.
Defining Complex Assets
Unlike other terms you might hear as you approach a divorce in California, the term “complex asset” has no legal definition. This means that the definition may change depending on who you ask. Some define complex assets as having a specific monetary value, such as over $1 million. However, this definition is also problematic because complex assets are often very difficult to value. With that said, complex assets often exhibit the following characteristics:
- Illiquid
- High-value
- Difficult-to-value
- Inherited
- Overseas
- Separate
- Corporate
Examples of Complex Assets in a Divorce
To understand whether you have any complex assets to divide in your upcoming divorce, it helps to review a few examples of these assets:
- Intellectual Property: Intellectual property is perhaps one of the most abstract forms of property imaginable. At the end of the day, intellectual property is simply an idea. However, this idea may have the potential to lead to profits. It may have already exhibited a profit-earning potential. Valuing intellectual property may be challenging due to its abstract nature.
- Pre-IPO Stocks: All stocks may be considered complex assets, but pre-IPO stocks may be especially complex. Again, this is because they are difficult to value. Pre-IPO stocks have yet to hit the market, and so their real value is unknown. High-earning executives often receive pre-IPO stocks as employment benefits.
- Businesses: Entire businesses are some of the most complex assets to divide in a divorce. Businesses may have various shareholders, and their value may be difficult to determine. The increase in value of a business during the marriage may be considered community property even if the business itself is considered a separate asset.
- Foreign Property: Foreign property may be difficult to locate, even if its value is clear. Offshore accounts and foreign real estate may be concealed by spouses, and it may be difficult to understand the value of this property due to the unfamiliarity of the foreign nation’s economy, tax regulations, and other features.
- Life Insurance Policies: Life insurance is a popular form of estate planning for wealthy spouses, and it may also provide tax avoidance benefits in some cases. The cash value of a life insurance policy may be considered community property, but in some cases, the life insurance policy itself is held by a trust, complicating matters.
- Commingled Assets: Complex assets may also be commingled, which means that they contain a mixture of both community and separate property. For example, a spouse’s inheritance may be tied up in the family home.
Where Can I Find an Experienced Dvorce Lawyer in California?
If you have been searching for a qualified divorce attorney in California, look no further than the RM Law Group. Over the years, we have helped numerous divorcing spouses in the Golden State – including those attempting to divide complex assets. We know that these assets may pose issues, but there are many strategies that can help strategies approach this situation with confidence and efficiency. Book your consultation today to discuss some of these potential strategies.
Jason Martinez is a co-founding partner of RM Law Group, LLP. His practice focuses exclusively on California Family Law and community property division, including litigation and settlement of complex and high-conflict divorce and child custody proceedings. Jason understands that divorce and family law issues have long-term effects on all family members, especially the children.
