Divorces are never easy or pleasant. The old saying “choose your battles” has never been more salient than in the context of a divorce proceeding. Therefore, the first consideration for any person going through a divorce, especially one in which substantial assets are involved, is the cost associated with achieving your legal objectives; both emotionally and financially.
Listed below are 5 of the more common mistakes that many High Net Worth Individuals make during a divorce. They include:
Failure to Consider Tax Consequences: Tax considerations are a critical component of a high net worth divorce.
When you divorce and you receive certain assets you could be taxed on distributions or you could agree on an alimony amount based on your budget without considering how much you will actually clear after taxes. Work with your attorney and a financial advisor to gain a clear picture of the true implications of distributions and alimony.
Hiding Assets: Some spouses think that they can simply transfer their valuable assets to a third party such as a business partner or child from a former marriage. These kinds of transfers can, and usually are, seen as fraudulent thus impacting one of the most important factors in a courtroom: trust and credibility. Hiding any of your assets is not worth the short and long term potential impact. When it’s apparent that you have transferred funds in an effort to hide them, you will be in a losing position for everything else related to a proper or reasonable divorce settlement.
Failure to Properly Account for Liabilities and Assets: As part of the divorce process, you will need to fill out a financial affidavit and provide certain financial documents mandated by the law. This inventory must be taken seriously. Take whatever steps necessary and ensure all information is accurate and up to date. It is a time consuming and very tedious process, but failure to do so properly can leave you holding onto liabilities that should not be yours or giving up assets or alimony you should not be obligated to give up.
Allowing Guilty Feelings to Get in the Way: At the inception of divorce, the spouse experiencing guilt tends to give more than they should (i.e. a spouse entitled to alimony waives all claims; a spouse with lucrative premarital assets agrees to give those non-marital assets to the other spouse). Though it sounds harsh, the truth is, when it comes to money, a divorce is the equivalent to the dissolution of a business and decisions should not be made on emotions or without sound professional advice.
Agreeing to Anything to Get the Divorce: Whether in a position of feeling you would give anything to get away from your spouse, or you’ve fallen in love with someone else and feel the need to speed up this process, it is not wise to agree to just anything to end the divorce. Agreeing to terms such as alimony, or division of assets and liabilities just to get away from a person or just to be with someone else, can have devastating effects on you financially short and long term. Therefore, it is important that a thorough analysis be taken before finalizing your divorce.
We are litigators, but we can also facilitate agreement between you and your spouse. Our lawyers have the experience to advise you which course will resolve your divorce in the best manner possible, always in accord with the outcomes most important to you.
The attorneys of Wilder, Mahood, McKinley & Oglesby, in Pittsburgh, Pennsylvania, have since 1978 assisted clients across western Pennsylvania in resolving family-related legal issues. Our founding partner, Joanne Ross Wilder, wrote the handbook used across the state by practitioners and judges in the family law arena. Our attorneys, , Brian E. McKinley,Darren K. Oglesby and Bruce L. Wilder update the book annually to keep current with changes in the law and society.
Meet with our lawyers and we can discuss your situation thoroughly and assess your options. To learn more, contact us online or call our law firm at 412-261-4040.