High Asset Divorce
Is High Asset Divorce Handled Differently?
What Are Considered Assets In A Divorce?
- Your House
- Any rental property
- Retirement accounts
- Bank accounts
- Your business/es
- Life Insurance
- Rare coins/stamps /collectibles /memorabilia
- Wine/ Alcohol
- Horses (not pets)
- All currencies including digital such as Bitcoin.
- Cars and other vehicles
- Furniture and other home furnishings
- Electronincs (tv, computer)
- Airline miles
- Professional licenses
- The stuff in the junk drawer you haven't seen since you were newlyweds.
Related Reading: How Does Discovery Work In Divorce Cases?
Common Mistakes in High Asset Divorce
With a large, complicated marital estate, the stakes only increase. This impacts areas like the division of property, child and spousal support, and more. As divorce is a highly emotional affair, some people hurry to make decisions that aren’t in their best interest.
When it involves a sizable amount of property and assets to be divided, such missteps can be especially damaging. Here are some common mistakes that may get you into trouble in a high-asset divorce.
1) Making Rash Decisions
Making hasty decisions without pausing to consider the consequences causes issues in divorce regardless of the wealth involved. Too often people agree to terms like spousal support or an unfavorable split of assets in a rush to get it over with and extricate themselves from a marriage.
Giving up too much or settling on inequitable terms has devastating and lasting financial effects. As heated as divorce becomes, it benefits you to pause long enough to fully consider all the ramifications.
This is especially important in a high-asset divorce. Depending on which side you’re on, you don’t want to give up too much just to make your life momentarily easier. From the other perspective, you don’t want to walk away with less than you may be owed instead of fighting for what is yours just because it’s more time-consuming.
2) Hiding Assets
During the division of property, you must disclose all assets. Just because that's the rule, however, doesn’t mean people always abide by it. Some individuals try just about anything to keep from sharing equitably with their ex.
This includes transferring valuable assets, whether money or property, to a third party, or otherwise attempting to conceal them.
In a high asset divorce, with a great deal of wealth on the line, this becomes even more tempting. Unless the person doing the hiding is incredibly clever, this fraud will likely be uncovered.
If that happens, your credibility is shot, and you place yourself at a disadvantage for the remainder of your case. Then again, if it’s your spouse squirreling away assets and this deception is revealed, you may be the one in the strategic position moving forward.
Related Reading: 8 Signs They Might Be Hiding Assets in Divorce
3) Not Investigating Your Own Resources
Another mistake all too common in high asset divorce is failing to look for hidden resources. The court only splits up what it knows about. Ideally, both parties will be honest enough to fully disclose everything. People can be devious, so that, however, doesn't always happen. There are methods to use when investigating assets.
- Examine bank records to look for large expenses you didn’t know about before.
- Brokerage statements may reveal purchases of heretofore unknown stocks and bonds.
- Look over recent tax returns to search for any inconsistencies.
These can be complex scenarios and it may be hard to know exactly what to look for on your own. If you suspect your spouse of this behavior, it may be in your best interest to hire a financial expert or an attorney well-versed in such matters.
4) Not Being Thorough Enough
Another branch of the same tree is failing to be thorough. This can relate to searching for hidden holdings in your high asset divorce, but it also has other applications as well. As part of your divorce, you will likely have to submit financial records and an inventory of all your resources and property. This often takes time, feels tedious, and seems like a horrible pain in the neck. But it is very necessary.
- It’s vital that this record is complete, accurate, and current.
- You need to be meticulous and detail-oriented when compiling this list.
- If there are mistakes or omissions, whether intentional or accidental, it may result in increased liabilities or lead to giving up more assets than you would have otherwise.
Related Reading: How Does the Division of Property Work in Washington?
5) Ignoring Tax Implications
One element that often goes overlooked in divorce and the division of property is the potential impact of taxes. Not only will your filing status be drastically different moving forward, but you may wind up with a significant financial burden thanks to the property you receive. This is especially important in the case of high-asset divorces.
If resources and property you wind up with the final settlement are subject to capital gains, you may find yourself on the hook for sizable tax liability in the near future. This manifests in a number of areas, and impacts stocks, real estate, and more.
And not all items are subject to the same regulations. For instance, the government taxes the sale of a principal residence differently than an early withdrawal from a retirement account.
While it may look like you and your spouse are evenly splitting your shared assets, if you’re not careful, you could face a much larger financial drain than anticipated. Before signing any binding agreement, it may be beneficial to have a professional look over the settlement.
Related Reading: Protecting Your Credit Score During Divorce
6) Wanting Revenge
Anger often plays a huge role in divorce. There can be hurt feelings, bitterness, and a sense of betrayal. Some people let these emotions get the better of them and try to use the dissolution of marriage for vindictive purposes. But revenge is often expensive.
Initially, it may feel good to make your spouse pay, or to keep them from getting anything. But retribution may not necessarily be the best basis for making financial decisions.
Some people try to hire the toughest, meanest attorney available to squeeze everything they can out of their ex. While you certainly want a lawyer willing to fight for you, a vicious attack dog isn't always the best choice. Divorce usually involves substantial stakes for the parties going through the split.
On a basic legal and theoretical level, there’s nothing that truly separates a high asset divorce from any other dissolution of marriage. In reality, however, you face different concerns.
When there's a larger than normal pool of property to divide, cases come with higher than usual economic risks. In order to protect your interests and your financial future, you may want to retain the services of an attorney with a history in this arena. The best lawyer for your case is usually one with the most complete understanding of your situation. Especially in a high asset divorce, counsel with experience in this type of split will likely be more successful in securing an optimal result than a legal bruiser.
Related Reading: Sweat Equity in Divorce
Only when working with a lawyer with the appropriate experience can you be sure that all elements of your estate will be properly characterized; that business shares, retirement benefits, and real estate holdings are accurately valued; and that your divorce settlement agreement addresses the division of shared assets in a way that maximizes the benefits of available tax and investment options.
At Goldberg Jones, we have significant experience in dealing with investment accounts, securities, pensions, IRAs, 401(k)’s, and other retirement vehicles. We commonly represent business owners and executives in cases that require business or stock valuations.
Our high-income clients look to us to take into account their bonus and commission income accounts. Lastly, we look to avoid future harm to our clients by counseling them as to issues of spousal support and the validity and effectiveness of Prenuptial Agreements.
Goldberg Jones provides sophisticated representation designed to protect our client’s long-term economic interests.