Divorce is difficult and challenging for both parties. This is especially true when the separation is a high net worth divorce, where there are additional assets to settle such as luxury cars, retirement accounts, investments, multiple properties, and other valuables. In the long process of settling a divorce, mistakes can be made that may negatively impact you and your loved ones in the future.
To avoid this scenario, here are five common mistakes to avoid during a high asset divorce.
- Emotional Decision Making
- Rushing the Divorce Process
- Sneaky Divorce Tactics
- Forgetting Tax Consequences
- Failing to Hire a High-Asset Divorce Attorney
Making Emotional Decisions
Many emotions are involved in a divorce. Feelings from guilt and anxiousness to happiness can all be on the spectrum as you move through the separation process. What’s important is to avoid acting irrationally or impulsively.
While keeping emotions at bay can be a difficult task throughout a divorce, emotional decision making can lead to regretful choices and undesirable outcomes. These can consist of receiving an inequitable settlement, losing additional assets, and other consequences that may result in further emotional turmoil.
If possible, it is recommended to remain amicable with your spouse throughout a high net worth divorce. This does not imply to “work with” your spouse and negotiate on your own. Rather, that it is important to be communicative and timely with deadlines and other obligations to preserve your financial and emotional health.
Speeding Up the Divorce Process
Conjoint with the mistake of emotional decision making in divorces is speeding up the process. Some couples are keen on separating as soon as possible. Unfortunately, this motive can hinder “due diligence” or reasonable decision making that must occur.
The desire is understandable but rushing to finalize your divorce can prevent you from receiving the best settlement possible. You may fail to properly divide several high value assets between both parties and face negative financial impacts for years.
Examples of possible assets could be:
- Real Estate
- Art Collections
- Business ownerships
- Retirement Accounts
The list varies for each case but ultimately, practicing due diligence with an attorney is advised. This can help you avoid accepting too little, paying too much in spousal/child support, and receiving an unjust share of assets.
Using Sneaky Divorce Tactics
Disingenuous divorce tactics may sound appealing to move along the process, but these can be disastrous. A few of these sneaky divorce tactics to avoid are false allegations and asset hiding or adjustments.
Making False Allegations
False allegations like child neglect, domestic violence, criminal behavior, etc. can be used to manipulate child custody, support, and additional aspects of a divorce settlement. It is important to be aware of this possibility and to express any of your concerns to your attorney.
Remaining honest throughout a high-net-worth divorce can help avoid losing credibility and prolonging the separation process. Lying under oath is considered perjury, a federal crime. In Tennessee, being charged with perjury can result in probations, fines, and prison time.
Asset Hiding & Significant Adjustment
Another sneaky divorce tactic is hiding or drastically changing asset worth. Asset hiding through temporary transfer to friends, business partners, or other methods can result in credibility loss and severe consequences such as jail time. Even unintentional asset hiding can result in negative ramifications.
Drastically changing assets is another common mistake. Making extravagant purchases to increase alimony or attempting to reduce the amount a spouse may receive should be avoided. Additionally, failing to report assets is another error. Penalties of these actions may result in paying sanctions for dishonesty or even court ordered surrender of additional assets. Ultimately, remaining honest about assets and understanding the complexity of asset division in Tennessee is in your best interest.
Forgetting Tax Consequences
In the rush to finalize a high net worth divorce involving additional assets, a mistake of forgetting tax consequences or inefficient tax handling can result in future implications. Working with financial advisors and experienced divorce attorneys can be beneficial to understand the assets you have been awarded after the divorce. From providing in-depth financial analysis and further evaluations, you can avoid future repercussions.
Failing to Hire a High-Asset Divorce Attorney
Consulting with an inexperienced divorce attorney out of haste or negligence when settling a high asset divorce can lead to unsatisfactory settlements. It is important to find a highly experienced and ethical attorney to help dissolve your marriage when financial stakes are high.
Fortunately, Conner & Roberts PLLC brings decades of high net worth divorce experience. By providing experienced guidance and support through divorce, our firm can help you through the demanding process of legal separation.
Call today at (423) 299-4489 or contact us online to begin your journey with a free initial consultation.