No marriage is immune to marital problems, even those with a high net worth. If you and your spouse are considering a divorce, it’s critical to know what mistakes to avoid—especially when there is a considerable amount of assets on the line. Here are the eight most common mistakes we see in high asset divorces.
1. Letting Your Emotions Decide
Divorce is a painful process, and it can be easy to feel overwhelmed, hurt, guilty, or angry. Whatever emotions you are feeling, it is important to treat your divorce akin to a business dissolution. Letting your emotions dictate your decisions can lead to a far-less-than favorable outcome for you.
2. Rushing Your Divorce
We often hear divorcing couples say, “I want this divorce over as soon as possible!” Whether you can’t stand to spend another moment with your spouse or you can’t wait to begin your life with a new person, rushing a divorce can lead to costly issues. A high asset divorce can be time-consuming. Unless there is a danger to one spouse, rushing a divorce is much more likely to lead to irreversible financial mistakes and should be avoided.
3. Hiding Assets from Your Spouse
It is exceedingly common for one spouse in a wealthy divorce to try and hide assets from the other. Often, this is to cheat the other spouse out of their fair share, but this fraudulent action an end up backfiring. If it is discovered that one spouse was dishonest with their financial statements, they will lose all credibility in court. It can also jeopardize the share of assets you’ll be awarded when the judge finalizes your divorce.
4. Ignoring Tax Consequences
Dramatic financial changes, such as a divorce, can often bring about unexpected tax changes. Depending on how your assets are divided, how spousal support is handled, and other financial decisions are made, you may find yourself paying considerably more to the government. Discuss your financial future with an experienced financial advisor, tax accountant, or other trusted professional.
5. Not Fully Investigating Your Assets
It’s also not uncommon for the higher earning spouse to have considerably more knowledge about the financial status of a marriage than the lower-earning spouse. If you’re not the primary earner in your marriage, it’s worth investing some money in a full financial investigation to uncover all assets and ensure that you are aware of what you are entitled to in the division of property.
6. Comparing Your Divorce
Every divorce is unique, so why compare yours to the divorces of other people in your life? There are certain factors, circumstances, and variables that can dramatically affect the outcome of your divorce. At the very least, you may be disappointed, but the worst case can be that you make grave mistakes because another person did the same.
7. Acting in Anger
It’s natural to feel anger during the divorce. It is a part of the grieving process. What you cannot do, however, is allow your anger to control your actions. Acting out of spite can lead to financial issues, criminal charges, and other negative consequences. Don’t max out credit cards, ignore bills, turn your children against your spouse, or attack their new partner—you will end up regretting it.
8. Skipping a Collaborative Divorce
Just because you can afford divorce litigation doesn’t mean it’s the best option. Many couples benefit from a collaborative divorce, in which they come together with their attorneys to negotiate the terms of their divorce. Not only is an uncontested divorce cheaper and faster, it also can reduce the stress of divorcing and help you advocate for your own interests in the divorce.
Divorce can feel like a legal minefield, but you don’t need to face it alone. Our Katy divorce attorneys at the Adams Law Firm are here to support you and provide experienced insight at every new development. We understand the unique problems that come with a high net worth divorce, and we have the knowledge to help you navigate your divorce.
Schedule a consultation today to discuss your legal options with our team. Contact our firm online, or by calling (281) 764-6087.