As a person with high assets, you know more than most how emotionally draining and complicated a divorce can be. Negotiations involving large sums of money and property are a challenge, but they are essential to keeping the divorce fair and free of future complications.
To ensure that everything proceeds as smoothly and fairly as possible, you should learn the mistakes many people make in this situation. Here is a broad discussion of those mistakes. By reviewing these items, you can keep from making these same errors in your divorce.
- Trying to Do It All Yourself
It is crucial to have a lawyer who has experience with high asset divorces. They can help you navigate the complexities of dividing high-value assets such as investments, stocks, and properties. Failing to hire an attorney could lead to major financial losses and disputes over property ownership.
When choosing legal representation, look for a lawyer who is familiar with high net worth divorces. They must be someone can guide you in asset protection strategies, tax implications, and other financial matters.
- Underestimating the Value of Your Assets
It may seem straightforward to divide up bank accounts, homes, and other tangible possessions, but many couples run into trouble when assessing the value of less tangible assets.
For instance, people often underestimate the value of intellectual property, such as patents and trademarks.
Sometimes, people forget to consider future earning potential. A professional degree or business ownership could be worth more down the line.
Failing to accurately appraise your assets can result in a lopsided, unfair property division.
- Failing to Properly Disclose Financial Information
Divorce is always a highly complex and emotional process, and this problem amplifies when large sums of money are at stake. As a result, some spouses may be tempted to hide assets from their partner, attempting to keep as much as they can for themselves.
Concealing financial information can backfire badly and lead to serious legal consequences. Failing to disclose all pertinent financial information puts a spouse at risk.
It’s also easy to accidentally miss pertinent financial information. This can lead to accusations of hiding assets, even when you’ve made an innocent error. Make sure you work closely with an attorney so you don’t skip something important.
- Failing to Account for Tax Implications
Failing to consider taxes can result in huge financial losses down the line.
For example, imagine an agreement where one spouse keeps the family home, and the other takes a brokerage account of equal value. At first, this seems like an even split. However, the home is often subject to capital gains taxes when sold, but a brokerage account is subject to taxes only when you withdraw funds.
Considering tax implications can save both parties from falling into financial pitfalls.
- Failing to Consider Conflicts Over Child Custody or Visitation Rights
In a high net worth divorce, it’s easy to get distracted by the money and the property. However, you must remember that child custody and visitation rights are equally contentious issues, and they can make or break the proceedings.
Ignoring the potential conflicts over these matters can result in costly emotional and financial damage for everyone involved. Carefully analyze your situation and think ahead. Emotions can trump pragmatism, and there is nothing more emotional than disputes over your children. If you’re not vigilant, a fight over custody or visitation could impact every other aspect of your divorce.
- Forgetting to Consider Support Obligations
Always remember that alimony and child support will impact your finances, too. These financial obligations are often separate from property division, and they can have a significant impact on your lifestyle.
Carefully factor all support obligations into your divorce settlement. Skipping this step could result in long-term financial instability.
Ford & Friedman is here to help you manage all aspects of high net worth divorce. To consult with our team, schedule time with us online or call us directly at (702) 904-9898.