What Are Common Mistakes to Look Out For In High Asset Divorces?

May 20th, 2024 by Tiffany Hughes

In high asset divorces, where a substantial amount of wealth and assets are involved, there are several common mistakes that individuals should avoid to protect their interests.

What is a High Asset Divorce?

A high asset divorce is characterized by larger and valuable net-worth, business interests, real estate, stocks and investments, retirement funds, and complicated tax implications. In every divorce, each party has a financial interest in what percentage of assets are divided, but with high asset couples, more money and assets are at stake. High asset divorces are typically more nuanced and complicated, considering it will take more time and effort to valuate and negotiate each asset.

What Are Common Mistakes to Look Out For In High Asset Divorces?

With more assets and money involved, the divorce proceedings can become more complicated and stress inducing. Knowing these common mistakes can save you time, money, and headaches.

Below are some of the most common mistakes and top concerns we see in high asset divorces:

1. Not Hiring Experienced Legal Representation: One of the biggest mistakes is not hiring an attorney experienced in high asset divorces. High asset divorces can be complex and require specialized knowledge to navigate property division, tax implications, and other financial matters effectively. You need an experienced high asset divorce attorney to provide you with asset division strategies, assist with the protection of pre-marital assets, protecting your business in a divorce, tax implications in a divorce, maintenance in a high asset divorce etc.

2. Failure to Fully Disclose Assets: Hiding assets in a divorce or failing to disclose them fully can have serious legal consequences. Both spouses are required to provide full financial disclosure during divorce proceedings. Failing to do so can result in penalties and undermine the integrity of the divorce settlement.

3. Ignoring Tax Implications: Dividing high-value assets can have significant tax implications in a divorce. For example, being awarded pre-tax assets versus after tax assets, and selling certain assets may trigger capital gains taxes. It’s essential to consider the tax consequences of asset division strategies to minimize liabilities and maximize overall financial outcomes.

4. Overlooking Future Financial Needs: It’s crucial to consider future financial needs beyond the immediate division of assets. This includes factors such as maintenance in a high asset divorce (formerly known as alimony), child support, healthcare costs, and retirement planning. Failing to account for these factors can leave one or both spouses financially vulnerable post-divorce and create endless litigation.

5. Letting Emotions Drive Decisions: Divorce is an emotionally charged process, especially in high asset cases where significant wealth is at stake. Allowing emotions to dictate decisions can lead to irrational choices, unnecessary money spent on litigation and dragging the divorce out, which may not be in one’s best long-term interests. It’s important to approach negotiations with a clear head and focus on practical solutions and to have an attorney that will navigate you through your high asset divorce.

6. Not Considering Business Interests: If one or both spouses own businesses or have significant investments in businesses, it’s essential to properly value these assets and determine their division or ownership post-divorce. Failing to address business interests can lead to prolonged legal battles and financial instability for both parties, not to mention unnecessary attorney’s fees incurred in a high asset divorce.

7. Rushing the Process: Divorce proceedings, especially in high asset divorces, can be lengthy and complex. Rushing through the process to reach a quick settlement can result in overlooking important details or making concessions that will be detrimental to you in the long run. It’s crucial to take the time to carefully consider all aspects of the divorce settlement in a high asset divorce.

8. Not Protecting Inherited or Pre-marital Assets: In many jurisdictions, inherited assets or assets acquired before marriage may be considered separate property and are not subject to division in a divorce. However, commingling these assets with marital assets or failing to take steps for the protection of pre-marital assets can result in the pre-marital assets being considered marital property subject to division in a high asset divorce.

9. Failing to Plan for Post-Divorce Financial Management: Divorce often necessitates significant adjustments to one’s financial management and overall lifestyle. It’s important to develop a comprehensive plan for managing finances post-divorce, including budgeting, investment strategies, tax implications in divorce, and long-term financial goals.

10. Not Considering Alternative Dispute Resolution: High asset divorces can quickly become contentious and expensive if litigated in court. Consideration should be given to alternative dispute resolution methods such as mediation and settlement, which can often result in more amicable and cost-effective outcomes.

High asset divorces present unique challenges that require careful navigation and strategic planning by experts who have experience with representing client’s in high asset divorces. By avoiding common mistakes and seeking professional guidance, individuals can have protection of pre-marital assets, protecting your business in a divorce, developing asset division strategies and overall achieve a fair and equitable resolution. Clear communication, meticulous attention to detail, and a focus on long-term financial stability are essential for navigating the complexities of high asset divorces successfully.

Need More Information or Representation?

If you are filing for a divorce with highly valued assets, are worried about protecting your assets, or need help with maintenance in a high asset divorce, give The Law Office of Tiffany M. Hughes, P.C. a call today at 773-893-0228 for a confidential, complimentary 30-minute phone consultation or email Tiffany Hughes directly at Tiffanyhughes@thugheslaw.com. Our entire practice is solely dedicated to the area of family law. We are highly experienced in providing legal representation if you are filing for a high asset divorce, navigating asset division strategies, protection of pre-marital assets, protecting yoyr business in a divorce, protecting your real estate in a divorce, explaining what is a high asset divorce, tax implications in a divorce, concerns regarding hiding assets in a divorce and maintenance in a high asset divorce.

About Tiffany M. Hughes, Divorce Attorney, Principal, Managing Partner, The Law Office of Tiffany M. Hughes, P.C.:

Tiffany M. Hughes is a divorce attorney and Managing Partner of The Law office of Tiffany M. Hughes. Recognized as a Top 100 Lawyer in Lawyers Magazine in 2018 and 2019, Super Lawyer from 2016 to date, and in addition to numerous other accolades, Ms. Hughes represents individuals in all aspects of family and matrimonial law proceedings, including litigation, mediation, allocation of parental responsibility (formerly known as custody), parentage, divorce and other child-related matters.

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