Passive Income and Divorce
Dedicated High Asset Divorce Attorneys help Clients Identify Property to be Divided
In any type of divorce proceeding, there are issues concerning the division of marital property to contend with, along with the potential for having to pay spousal support. In high asset divorce cases, there are significant amounts of money on the line, and one of the keys to getting what you are entitled to in your divorce is ensuring all income and assets are included in negotiations. At Nicholas Family Law, we have over 30 years experience in working with clients in these types of situations. Sources of passive income, though not always obvious, are often a factor and can represent significant amounts. To ensure you get what you are entitled to, our Denver divorce attorney will thoroughly review all of the details of your individual case, making sure this type of income is included in any potential settlement.
Your Rights to Passive Income in Denver Divorce Proceedings
Under Colorado divorce laws, all marital property and assets earned, acquired, or accumulated during your marriage are subject to equitable division between you and your spouse. In order to make a fair judgement in these matters, it is important that all assets and income be disclosed. In any divorce case, the Colorado Courts require that the following are among the many documents which are to be submitted:
- Income tax returns for the last three years;
- Real estate documents;
- Statements regarding any businesses you own or have a share in;
- Statements concerning any investments or other financial accounts;
- Sworn disclosures, showing any types of passive or active income you earn.
Passive income refers to money you make from investments, shares, or other holdings, as opposed to the active income you earn from working. Passive income in high asset cases can add up to significant amounts. Unfortunately, it is also easy to hide. At Nicholas Family Law, our Denver divorce attorney has the skill and experience needed to uncover these assets, so they can be included in decisions relating to spousal support and marital property division.
Including Passive Income in Your Divorce Settlement
In general, if your passive income reaches a certain amount, it must be claimed on your yearly tax return. The Internal Revenue Service (IRS) states that there are two common types of passive income:
- Income from real estate and property holdings: This may be in the form of rents paid, as the result of easements and granting property rights, or due to appreciation of homes, land, or offices you possess.
- Income from business and financial activities you do not actively engage in: This may include proceeds from investments, annuities, and other financial accounts, as well as project royalties, website advertiser fees, or interest on person to person loans.
All of the above can add up to significant amounts of money, but they must be uncovered and listed in financial disclosures before they can be included in your divorce settlement. Call or contact Nicholas Family Law online today to request a consultation to discuss whether if this is a consideration in your case and how our Denver divorce attorney can assist you.