Wealthy Ohio couples often engage in strategic tax planning in order to avoid paying large amounts in taxes each year. These strategies may work well as long as the couple stays married. However, those same tax strategies can backfire in a high asset divorce.

A lot of tax strategies used by wealthy Ohio couples involve spreading their assets around in order to limit tax liability for each person. This means that assets that may have been considered non-marital assets may lose that protection in the event of a divorce. Those couples with prenuptial agreements may still be protected, but if the absence of such an agreement, the party whose assets are being shared may have to keep sharing.

It is doubtful that a judge would be sympathetic to the parties' tax planning strategies when it comes to dividing assets in a divorce. Once the assets are mixed, there is often no turning back. This is not to say that couple's should not engage in strategic tax planning, it just means that both parties simply need to be aware of the risks should their marriage fail.

Ending a marriage is difficult enough, but for a couple engaged in a high asset divorce, the process can be problematic and frustrating. Any divorce settlement is going to have to consider those assets that may have been co-mingled during the marriage and are now considered marital property. If the parties are able to be amicable and work together, they may be able to minimize any damage tax planning may have done. So long as the final settlement is fair and equitable, the parties may be able to salvage at least some of their non-marital assets that were co-mingled for tax reasons during the marriage.

Source: Investors Chronicle, "Divorced tax savers stung for millions," Katie Morley, Dec. 3, 2012