Going through a divorce rarely is easy. It becomes even more difficult and complicated if you and your spouse have a lot of assets. If you have multiple investment accounts, own multiple properties, have overseas accounts and valuable collections or memberships, it can take a lot of time and effort to account for these assets and negotiate dividing them in divorce. Often, those with high assets make mistakes in the process.
So, if you want to avoid making missteps in your high-asset divorce, here are five common mistakes you should know about:
- You rush to reach a divorce settlement, just so you can get your divorce over with. When you have high assets, rushing to a settlement can impact your finances for years to come. You may end up paying for alimony longer than you needed to or paying excessive child support. You need to take the time to reach a fair, equitable divorce settlement.
- You try to hide assets. Hiding assets in divorce is illegal. If you try to do it, you could end up having to give your spouse all the assets you were trying to hide. A judge may for you to pay your spouse’s legal fees and you may have a hard time keeping the assets you really care about.
- You neglect to investigate if your spouse may be hiding assets. If your spouse is a financial wheeler and dealer, they may try to hide assets. You may need to hire a forensic accountant to review your financial statements and tax returns to ensure your spouse isn’t hiding assets.
- You don’t consider the tax implications of the property you will receive in the divorce. For example, you may face paying a capital gains tax on the divorce settlement you receive.
- You decide you want to get revenge on your spouse. If you decide you want revenge, you easily could end up in a long, drawn-out battle over your divorce assets and child custody. You could spend more time and money on your divorce than you need to. In the end, you will drain some of the assets you could have received in your divorce.
When you have a significant number of assets, in several different accounts, you need to consult an attorney who has worked on previous high-asset divorces. You will need someone to help you account for all your assets and negotiate dividing them with your ex. You will need to plan ahead for the long-term implications of your divorce settlement. Finally, by keeping your emotions out of dividing assets with your spouse, you can avoid making costly mistakes in your divorce.
