If your divorce involves some valuable assets, you’ll need to proceed carefully. In every decision, evaluate the cost – both emotionally and financially.
Whether you accumulated wealth during your marriage, or one or both of you entered the marriage with a high net worth, you’ll need to protect yourself in your divorce.
Make sure you don’t make these common high net worth divorce mistakes and contact a high net worth divorce lawyer immediately.
1. Hiding Your Assets
In an effort to put less on the table of division, you may be tempted to transfer your assets somewhere else, such as to a business partner.
However, these moves are almost always exposed and can actually be seen as fraudulent. You may face criminal charges and fines if you try to hide your assets during a divorce.
Not to mention, it will damage any credibility you might have had before. This will impact every other decision made in the divorce process.
In addition to whatever criminal penalties you might face, the judge in your divorce case can sanction your conduct by awarding your spouse a disproportionate share of the community estate or reconstituting the community estate to the value it would have had but for your fraudulent conduct. After the divorce, you could owe your spouse a substantial money judgment.
2. Being Sloppy When Accounting for Assets
You will be required to fill out a financial affidavit. You’ll also be responsible for other financial documents that inventory your financial assets.
Don’t leave anything out. If you don’t take the time to fill out these documents accurately, you may end up giving assets or alimony away when you shouldn’t have to. You also may be left with liabilities that should really belong to your spouse.
Enter negotiations with a complete inventory of assets and liability for a better outcome. Your assets include bank accounts, homes, vehicles, property that can be sold, businesses, business debts, personal debts, investments, and retirement accounts.
3. Being Guided by Emotions
Your emotions will likely run all over the place during your divorce. From anger to jealousy to guilt to relief, you’ll likely feel different each day. However, don’t let your emotions guide your decisions in the division of property.
For example, don’t fight for an asset you don’t even like just because it would hurt your ex to lose it. Don’t waive your right to alimony or give non-marital assets to your spouse out of guilt. It’s natural for emotions to be thick, and it’s natural to want to make decisions based on emotions, so protect yourself by getting a high net worth divorce attorney on your side to help guide your decisions.
4. Not Considering the Long Term
You may want to go after the high-value assets, like an expensive home or a large sum of cash. Initially, this seems like a good idea. However, this fails to take the long term into consideration.
High-value assets may incur considerable expenses and taxes that you will be left to handle after the divorce. When you receive a portion of property after a divorce, it affects your tax status. This can bring tax problems on you for years.
Consider all the details of taxes on each item you are attempting to win. It is always a good idea to consult with a tax professional before you file for divorce or early on in the divorce process to understand the potential tax implications of your divorce.
Keep in mind that your divorce lawyer is not an accountant and is not qualified to advise you on tax questions.
5. Signing Without Understanding
High net worth divorces are complicated, and there is much at stake. Because of this, the proceedings can be exhausting as both parties fight for what they feel they deserve. It’s easy to get worn down and sign something just to end a particularly trying time, but this will almost always hurt you.
Don’t sign anything until you completely understand it. Hire an experienced high net worth divorce attorney who can analyze documents and advise you in your best interest. You won’t regret it.
Ben Carrasco is an experienced high net worth divorce attorney in Austin, TX who isn’t afraid to fight to get you what you deserve.