Divorces are rarely pleasant or easy. High net worth divorces or high asset divorces are particularly complex, as a large amount of assets, businesses, money, property and other items are at stake. As a result, spouses often have additional considerations when it comes to spousal maintenance and property division.
When a divorce involves a great amount of wealth, it is crucial that you avoid making mistakes. Even the smallest mistake could result in losses amounting to millions of dollars. Some mistakes to watch out for include:
1. Agreeing to anything
You may be desperate to get a divorce as soon as possible, but that doesn’t mean you should agree to all alimony terms or asset division requests that your spouse makes. To avoid any devastating effects on your finances, thoroughly analyze any terms and conditions before finalizing the divorce.
2. Making decisions because of guilt
Don’t allow guilt to force you into making costly mistakes. When one spouse wants out of the marriage, he or she is bound to feel varying levels of guilt. As such, the spouse experiencing guilt often tends to give more in the divorce than they should. Keep in mind that all divorce-related decisions should not be made based on emotions.
3. Concealing assets
It is illegal to conceal assets and liabilities in a divorce, whether intentionally or not. You must identify all your marital assets and debts, and ensure that the court accounts for them properly. Though it may seem clever to transfer assets to a business partner, friend, or even a child from a former marriage, know that the court will deem such action as fraudulent. Hiding assets can make you lose your credibility and can negatively impact your divorce.
4. Failing to investigate
If you are the spouse with the lower income in the marriage and are getting divorced from someone who is more financially accomplished, do your best to investigate whether he or she is concealing assets or income from you. Do not simply accept what your spouse is telling you at face value, as failing to investigate could prove to be a costly mistake on your part later on.
5. Failing to consider the tax consequences
Tax considerations are a very important factor in a high net worth divorce. There can be especially significant tax consequences when spouses are awarded valuable assets during property distribution, such as a rare piece of artwork or the marital home. If you receive less liquid assets, it may be difficult to come up with the money to pay taxes on the assets distributed.
6. Failing to consult professionals
Don’t rely on advice offered by relatives, friends, and business associates. Everyone’s case is different, and it is a mistake to compare your particular case to anyone else’s. In a high net worth divorce, it is crucial to consult your own divorce attorney. Also consult with tax advisors and accountants who can help minimize your tax obligations after the divorce.
These are just some of the priciest mistakes you could make in a high net worth divorce. If you are considering getting a high net worth divorce or are the aggrieved party in a divorce, consult with an experienced divorce attorney as soon as possible.