Couples who have a high net worth and are going through a divorce have a lot at stake. High net worth divorces are also quite complex, most of the time. While a good divorce/family law attorney is important in a lot of divorce cases, it’s absolutely imperative in a high net worth divorce.
Like any divorce, a high net worth divorce is emotional. Emotions run the gamut from anger, disappointment, embarrassment, and guilt. In a high net worth divorce, with a large amount of money, property, assets, and sometimes businesses at stake, you just can’t let emotions get the best of you! Quite often this is where mistakes are made.
Here is a list of the top mistakes that I’ve seen people make in high net worth divorces:
- Letting anger and revenge rule. Anger can be a good motivator, but it’s a fleeting feeling. Revenge is not a good platform on which to make sound financial decisions. Typically the money you are making the other person spend on attorney fees is your money too, and revenge often drags out the legal process. Listen to your lawyer and do your best to set anger and revenge aside.
- Letting guilt get the best of you. On the other end of the spectrum, guilt can lead people to give more than they should, just to appease that guilty voice in their head. Of course, you should be fair, but again, try to avoid making decisions based on emotion without sound advice from your lawyer.
- Failure to consider tax consequences. Tax considerations are an extremely important part of a high net worth divorce. A Certified Financial Divorce Specialist is always a welcome and usually necessary member of your legal team in a high net worth divorce. Don’t proceed without one.
- Taking advice from friends. Unless your friend is an attorney who deals with high net worth divorces, please take their opinions and recommendations with a grain of salt. Even if they’ve been through a high net worth divorce themselves, every situation is different. Don’t count on yours having an outcome exactly like theirs. You are almost guaranteed to come out with a better outcome if you don’t listen to your friends.
- Agreeing to anything. Sometimes people come to me and say they just want out of their marriage immediately, regardless of the consequences. “I will give them anything just to get away from them!” they say. Barring domestic abuse, which obviously requires immediate action, I urge you do not agree to alimony terms or division of assets/debt just to get away from someone quickly. This can be devastating to your financial future and it is best to follow the normal steps of a high net worth divorce, including analysis of your financial situation.
- Hiding assets. Let me be frank; hiding assets is not worth it. No matter how clever you think you are when you are transferring assets to a third party, these will almost always be found out if your spouse hires a good attorney. This will be seen as fraudulent and you will lose credibility – something you critically need to come out with a good settlement in your divorce!
Unfortunately, getting married is the easy part; unwinding a high net worth divorce is the hard part. Consult with an experienced high net worth attorney as soon as possible if you or your spouse is commencing with serving divorce papers. You will be glad you did.