The divorce process can not only be tough on your emotions, but it can also be tough on your financial resources. Finances are one of the topics most divorcing couples fear because the unknown of the future can be daunting. When one or both spouses are a high net worth individual, things can get even more worrisome and complicated.
While it may be easy to panic, if you find yourself in a divorce situation with high net worth assets, one thing to remember is that there are experienced divorce attorneys who specialize in high net worth divorces that can guide you and represent you every step of the way. Due to this, one of the first steps we recommend as you approach a divorce is to find the right divorce attorney for you. In addition, you can become knowledgeable of ways to protect your assets. Below are a few tips to get you started:
Discuss Strategic Negotiations with Your Divorce Attorney
Have an open discussion with your divorce attorney, which includes evaluating and prioritizing which assets you wish to keep after the divorce is final. These discussions may involve personal, emotional ties with some assets, but the conversation should also be strategic and think through the assets that may have a greater long-term value.
Protect Your Retirement Accounts
There are some ways to protect your retirement accounts during a divorce. Ensure to discuss this topic with your experienced divorce attorney. Some ways include knowing what rules each of your retirement accounts have and getting a Qualified Domestic Relations Order, which defines how funds may be transferred from each retirement account.
Know the Difference Between Taxable and Nontaxable Assets
It is important to know what impact taxable assets may have on you and/or your soon to be ex during the divorce process. For example, know that the difference between getting the full 401(k) vs. a savings account valued at a similar amount is that the savings account can likely be accessed immediately while there are likely tax obligations if money is taken out of the retirement account early.
Avoid Unnecessary Expenditures
It is a myth that making lavish expenditures before filing for divorce can increase your awarded spousal maintenance. This attempt to get more out of the divorce can backfire – it may be noticed by the court, increase your debt, and hurt your overall position.
RELATED: Read about the top items to watch out for in a high net worth divorce.
Consider the Value of Licenses
When thinking through the assets of your divorce, consider the licenses you and/or your spouse have acquired (e.g., lawyer, doctor, accountant, and other professional designations). Discuss whether such licenses have any value and how they should be dealt with in the divorce. For example, if one spouse acquired a license or started a business, and the other spouse made professional sacrifices to help them succeed, the spouse without the license may be entitled to reimbursement or compensation.
A divorce may come as a surprise to you, but once you know that you are nearing or in the divorce process, there are ways you can protect yourself and your assets.
For information about what our experienced attorneys at Wilder Mahood McKinley & Oglesby can do to help you in your high net worth divorce, contact us online or call our office in Pittsburgh, Pennsylvania, at 412-261-4040.
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