Divorce is complicated enough when you’re dividing a house, a couple of bank accounts, and some retirement savings. But what happens when your spouse owns a business, has significant investments, owns multiple properties, or earns money through bonuses, stock options, or other complicated compensation?
If you’re a stay-at-home mom or you’ve spent years managing the household while your spouse built a business or career, the financial side of divorce can feel especially overwhelming. You may know that there are significant assets, but you may not know exactly what those assets are worth, where everything is held, or even what you’re entitled to.
According to the CDC National Center for Health Statistics (NCHS), the U.S. sees roughly 630,000 to 750,000 divorces each year. But not all of those divorces look alike. A lot of the information you’ll find about how to file for divorce assumes a fairly straightforward situation: two spouses who both work, a family home, a few retirement accounts, and perhaps some savings. That’s useful information if your finances are simple.
It doesn’t tell you much if your spouse owns a company, has a complicated investment portfolio, owns several properties, or you suspect that not everything is being disclosed. The basic process for filing may be similar, but the financial side of a complex divorce can take much more time and careful investigation. And when substantial assets are involved, a mistake early in the process can have much bigger consequences later.
If coercive control or another form of abuse is part of the reason you’re considering divorce, the financial side of your marriage may be even more complicated than you realize. Financial abuse can include controlling access to money (even for groceries and basic expenses), withholding financial information, limiting a spouse’s ability to work, hiding assets, debts, or income, or making the other spouse financially dependent on them.
Sometimes that control is presented as something that’s supposedly in the family’s best interest. Maybe you’re told that being a stay-at-home mom is best for the kids, while your spouse maintains control over the family’s money. Or maybe you’ve simply been left out of the financial decisions for so long that you don’t know what accounts exist, what the business is worth, or where the family’s money is going.
That can make divorce especially intimidating. If your spouse has always handled the investments, business accounts, taxes, or other major financial decisions, you may not even know exactly what your family owns or how much it’s worth. Your spouse may also have convinced you that the income is “his” because he earns it while you “do nothing” at home with the kids all day. But earning the income and contributing to the household are not necessarily the same thing, and the law likely treats marital property and income very differently from the way your spouse describes them.
And if your spouse is still controlling that information, simply asking them to provide a complete financial picture may not be enough.
So how do you figure out what you actually have?
That’s where careful financial disclosure, experienced legal counsel, and, when necessary, financial professionals such as forensic accountants can become important. You don’t need to understand every account or business transaction yourself. But you do need a process for finding out what’s there before you agree to how those assets will be divided.
Here’s what you should know if you’re facing a complex divorce.
What Actually Makes a Divorce “Complex”?
There’s no single checklist that turns a divorce into a complex one. Usually, it’s the finances that make things more complicated.
Business ownership is one common factor. Unlike a publicly traded stock with an easily accessible market price, a privately owned business may require a professional valuation to determine what it’s actually worth.
Other factors can include:
- significant investment portfolios
- multiple homes or other real estate
- ownership interests in several businesses
- stock options, bonuses, or carried interest
- complicated compensation arrangements
- trusts or other financial structures
- assets acquired before and during the marriage
- substantial differences in the spouses’ incomes
- significant debts, such as student loans, business debts, mortgages, or lines of credit
- concerns about undisclosed or hidden assets or debts
And it’s important to look at the liabilities as carefully as the assets. A large student loan, business debt, or line of credit can affect the overall financial picture just as a significant investment account can. If you’re not aware that a debt exists—or don’t know who is responsible for it—you may not have a clear picture of your family’s financial situation.
Suspected hidden assets or debts can make an otherwise manageable divorce much more complicated. If you believe your spouse isn’t being completely transparent about the family’s finances, your attorney may need to investigate rather than simply rely on the financial information provided. That can turn the financial side of your divorce into something closer to a financial investigation.
Filing Still Starts the Same Way
The good news is that filing a complex divorce doesn’t necessarily mean there is a completely different process for starting your case. You’ll still need to meet your state’s residency requirements, file the appropriate petition with the court, and formally notify your spouse.
If you suspect abuse or coercive control is a factor in your relationship, though, talk to your lawyer about that before filing or notifying your spouse. Depending on your circumstances, you may need to make a safety plan or take additional precautions before your spouse learns that you’ve filed for divorce.
The difference in a complex divorce comes after the case gets underway. In a relatively straightforward divorce, the spouses may be able to exchange financial information, negotiate a settlement, and finish the process within a matter of months. A complex divorce can take considerably longer, particularly when businesses, substantial assets, or questions about financial disclosure are involved.
That’s not necessarily a sign that something has gone wrong. It can simply take time to identify, document, value, and divide everything fairly under the applicable laws. It will take even longer if your spouse isn’t willing to cooperate with the process. If your spouse doesn’t want the divorce, has not been open about finances in the past, or has a history of delaying or withholding information, bring those concerns to your lawyer early.
Ask how they plan to obtain the financial information you need and what legal options are available if your spouse refuses to cooperate, stalls the process, or fails to provide required disclosures. You don’t have to figure out how to make an uncooperative spouse participate on your own. That’s part of what your legal team is there to help you navigate.
Where Complex Divorces Actually Differ
The biggest difference usually shows up in the financial disclosure process. Both spouses are generally required to disclose their finances during divorce. But when there are significant assets or debts or complicated financial arrangements, simply looking at the documents your spouse provides may not be enough.
This is where a forensic accountant can become an important part of the team.
A forensic accountant can look beyond the obvious numbers and help determine whether the financial picture you’re being shown makes sense. Depending on the circumstances, that might include tracing money through business accounts, comparing reported income with spending, examining business expenses, or looking for income or assets that may not have been fully disclosed.
For example, if your spouse owns a business, the business’s financial statements may tell only part of the story. A professional may need to determine whether the business expenses are legitimate, whether income is being reported accurately, and what the business is actually worth.
Your divorce attorney typically coordinates this kind of investigation rather than expecting you to figure it out yourself. If you’re dealing with a high-asset divorce in Southern California, for example, working with an Orange County complex divorce lawyer who regularly handles these cases can make it easier to determine what financial professionals you may need and when.
Business Valuation Matters
If your spouse owns a business, figuring out what that business is worth can become one of the biggest issues in the divorce.
There are several approaches to valuing a business. Depending on the circumstances, an appraiser may consider its earning capacity, compare it with similar businesses that have been sold, or look at the value of its underlying assets.
The method used can make a significant difference in the resulting valuation. That’s why accepting a number simply because it appears on a spreadsheet or because your spouse says that’s what the business is worth may not give you the complete picture.
Property Division Gets More Complicated Too
Once you know what assets exist and what they’re worth, you still have to determine how those assets should be divided. In states with community property laws, marital assets are generally divided according to specific legal rules. But applying those rules becomes more complicated when property has been mixed together over the course of a marriage.
For example, your spouse might have owned a business before you married. That doesn’t necessarily mean every dollar of its current value is automatically treated the same way. The increase in value during the marriage, and the reasons for that increase, may need to be examined. The same issue can arise with investment accounts, real estate, and other assets that were acquired before the marriage but changed in value during it.
This is one of those areas where having a general understanding of property division isn’t necessarily enough. Your attorney can help determine how the rules apply to the specific assets in your marriage.
Don’t Assume You Have to Figure Out the Finances Yourself
If you are the spouse who handled the kids, the house, and the day-to-day family life while your partner handled most of the money, a complex divorce can feel particularly intimidating.
You don’t need to become a financial investigator overnight. Start by gathering the financial information you do have (and preferably before you initiate separation or divorce proceedings). Tax returns, bank statements, mortgage documents, investment statements, business records, property records, and other financial documents can all help your attorney understand the bigger picture.
Don’t be embarrassed if you don’t understand all of it. That’s part of what your legal and financial team is there to help with.
A Resource for Moms Experiencing Financial Abuse
If some of this sounds familiar, you may also find it helpful to hear from another mom who has been through it herself. Tina Swithin, founder of One Mom’s Battle, has written about her experience with financial abuse during divorce. She shares practical information and resources for other women navigating difficult divorces on the One Mom’s Battle blog and in her book, Divorcing a Narcissist: Advice from the Battlefield.
Her perspective can be a helpful reminder that you’re not the only person who has found the financial side of divorce confusing or overwhelming. Her experience isn’t a substitute for advice from your own lawyer, especially because divorce laws vary by state. But hearing from someone who has navigated these challenges herself can give you additional questions to bring to your legal team and help you feel a little less alone in the process.
Why Local, Experienced Counsel Matters
A complex divorce isn’t usually the time to rely solely on a generic online guide or a fill-in-the-blank divorce form or even what your friend who went through a divorce last year tells you.
The basic paperwork may be straightforward. The difficult part often comes afterward: figuring out what the marital estate actually includes, determining what those assets are worth, understanding which assets may be separate or marital property, and making sure important financial information hasn’t been overlooked.
There can also be additional complications when one spouse’s income fluctuates significantly or comes from multiple sources, since that can affect questions such as spousal support and other financial issues.
You don’t necessarily need to know the answers to all of these questions before you file. But if your marriage involves significant assets, a business, multiple properties, complicated compensation, or concerns about financial transparency, it’s worth understanding the financial complexity of your situation before making major decisions about your divorce.
The goal isn’t simply to get through the paperwork and move on as quickly as possible. It’s to make sure you understand the financial picture you’re dealing with and have the professional help you need to navigate it.
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