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Dealing with renewable energy assets when going through divorce

On Behalf of | May 2, 2024 | Divorce |

Renewable energy assets, like solar farms, wind turbines and stakes in sustainable technology companies, are becoming more common in high-asset divorce settlements.

As the world shifts towards green energy, the value and complexity of these assets also grow. This creates unique challenges for both parties involved in a divorce.

The value of renewable energy assets

One of the first hurdles in dealing with renewable energy assets in a divorce is understanding their true value. These assets often do not have a straightforward valuation because their worth can depend on unpredictable factors like government policies, technological advances and market demand for green energy. Both parties must work with financial experts who specialize in renewable energy to ensure a fair assessment. This step helps avoid future disputes over assets that may increase or decrease significantly in value.

Long-term investment considerations

Renewable energy assets are typically long-term investments. They might not yield immediate returns but can be highly profitable over time. During a divorce, one party might prefer to keep these assets, anticipating future gains, while the other might opt for more liquid assets, like cash or real estate.

In Massachusetts, the courts work for an equitable division of assets. Having renewable-energy assets requires careful negotiation to ensure both parties feel the settlement is equitable. Each party must consider not just the current value of the assets but also their potential future worth.

Tax implications and incentives

Dealing with the tax implications of renewable energy assets is another challenge. Many countries offer tax incentives for investing in renewable energy, which can complicate the division of these assets in a divorce. The parties need to understand how these incentives affect their taxes and the overall financial outcome of their divorce settlement. It might be beneficial for both to continue co-owning the asset temporarily or arrange for one to compensate the other for future tax breaks.

Handling renewable energy assets in a high-asset divorce requires careful consideration and forward thinking to achieve a settlement that acknowledges both the current and potential value of these green investments.