When a divorce involves two individuals with a high net worth, the process can prove to be exceedingly more complicated due to the extent of the assets that need to be located, valuated, and divided. Additionally, high net worth couples may face other hurdles when determining custody, child support, and alimony matters due to the fact that the higher-levels of income means the basic calculations that the state produces no longer are the presumptive amounts and there are many ways support can be calculated that end up resulting in many different amounts.
Given the many moving parts in the dissolution of these marriages, it is crucial to be aware of the common mistakes to avoid during a high net worth divorce that could negatively impact your case. Our divorce attorneys have over 35 combined years of exclusive family law experience. We have handled a variety of these types of divorces and know how to deal with the various challenges that may arise.
Unexpected Consequences from Financial Decisions
During the marriage, or even during the course of a divorce, a person may take financial steps that have unintended consequences relating to the final distribution of the marital assets. For example, there is a legal argument that funds or property that was inherited should remain the individual property of the person who inherited it rather than being divided. However, there are ways to make your argument stronger and actions you can take that can weaken your argument. If you inherit funds, the best way to protect them as individual property is to keep them in a separate account in your individual name. The moment these funds start getting comingled with joint accounts, the argument to keep them separate starts to diminish.
Avoid Lavish Expenditures During Your Divorce
In a high net worth divorce, both parties have a lot riding on the eventual outcome of the case. Because of this, some high net worth spouses mistakenly believe that if they engage in a series of lavish expenditures before filing for divorce, they can increase the alimony they may be entitled to or retain the expensive items as part of their settlement or simply try to remove that amount of money from being part of the final division. However, this could not be further from the actual truth. Assets acquired during the marriage by either party, whether it be luxury items or debt due to excessive expenditures, will be divided equally between you and your spouse in the event of divorce. If the court determines that you have dissipated assets, then the court can award your spouse more than 50% of the remaining assets or penalize you in some other way through the final division.
An attempt to inflate a luxury lifestyle in the hopes that the court will award higher spousal maintenance can severely backfire and instead increase the stockpile of debt, which if the court finds you incurred purposefully, you may be on the hook for repaying your spouse what you spent. Engaging in lavish expenditures before filing for divorce also may put the other spouse on alert that their partner may be trying to shield some of their assets by making elaborate cash purchases.
Avoid the Mistake of Hiding Assets or Debts in a High Net Worth Divorce
Another grave error to avoid during a high net worth divorce is attempting to shield any holdings or assets from the other spouse. In most high net worth divorce cases, each spouse’s attorney may consult either a joint or individually retained forensic accountant to ensure that all assets are located and evaluated properly. Therefore, trying to hide any holdings by not disclosing them in hopes that they will be missed may not only prove futile but could subject an offending individual to legal punishments in some cases as well as a judge awarding the non-offending spouse a higher distribution.
Neglecting to Get a Professional Valuation is a Mistake in High Net Worth Divorces
Another serious mistake to avoid in a divorce involving high net worth is neglecting to get a professional evaluation of the assets owned by both parties. In the absence of a skilled appraiser, the full value of the couple’s assets may not be realized, and one spouse could be walking away with less than they may otherwise have obtained. An appraiser can be invaluable to assess the worth of a couple’s marital property to ensure an equitable division. There are appraisers for many different assets found in high net worth divorces, such as for rental properties, businesses, partnerships, pensions, jewelry, and collectibles just to name a few.
Contact an Attorney to Avoid Making Mistakes During a High Net Worth Divorce
An experienced attorney at O’Connor Family Law can help you understand the mistakes to avoid during a high net worth divorce and offer guidance at each stage of your case. We can help you find excellent appraisers and forensic accountants to make a complete evaluation of your marital assets and work to get you your fair share. Our extraordinary team can discuss your legal options and support you during this difficult time. Call (774) 214-2137 our office to get started on your case today.