What Not to Do in a High-Net-Worth Divorce
High net-worth divorces come with unique challenges. Not only do you want to divide up the marital estate, but you also want to make sure that both parties receive fair compensation. The problem is that there is a lot of money involved, and it can quickly turn into a battle over how much one spouse gets. If you don't take steps now, you could end up losing out on a significant part of your wealth. Here are some things to avoid when dividing a high-net-worth divorce.
- Don't try to force the other side to accept less than what he/she deserves.
- Don't agree to split something without getting expert advice.
- Don't let emotions cloud your judgment.
- Don't sign anything without having a lawyer look over it.
- Don't go behind your partner's back.
- Don't give away too much information about your financial situation.
The emotional roller coaster of divorce can cause many people to act impulsively. Whether it’s because they feel like they are losing control over their lives, or because they want to hurt the person who wronged them, it’s important to consider the consequences of making a hasty decision.
When faced with a difficult situation, it’s easy to fall into the trap of acting irrationally. If you find yourself in this position, take some deep breaths and try to step back from the situation. You don’t have to agree to anything just because someone else wants something. Remember that you ultimately have control over what happens next.
Think about how you would react in a similar scenario if it were a professional setting. Would you say yes to a client without thinking about the possible negative repercussions? Of course not. This same principle applies here.
If you decide to go ahead with a deal, you won’t regret it later. However, if you choose to walk away, you could end up feeling guilty for giving up on your dream home.Do Correctly Identify Assets
In any divorce, assets must first be identified. This includes everything you own, including real estate, businesses, bank accounts, retirement plans, vehicles, jewelry, etc. If you don't know what something is, ask yourself questions about how you acquired it.
For example, did you purchase the asset with money you earned during the marriage, or did someone else pay for it? Did you inherit the asset? Was it gifted to you? Was it given to you as part of a settlement agreement?
If the answer isn't clear, you'll want to hire a professional to help you sort out your assets. They'll be able to tell you whether the asset is yours alone or belongs to both parties equally.
Once you've determined what each party owns, it's time to figure out where those assets are located. What percentage does each party own? Is one person working while the other stays home? Do they have joint checking accounts? Does one spouse work outside the home full-time while the other works part-time?
The location of the asset matters because state laws dictate how much of the asset goes to each partner. When dividing up the assets, make sure to keep track of the percentages of ownership and the locations of those assets.Do Properly Value Your Assets
Asset valuations are important because it helps people understand how much money they actually have. When individuals own luxury or high-value assets, they often want to know how much cash they have. They might also want to know what their home is worth. In addition, sometimes a spouse wants to know how much their partner owns. If there are children involved, they might also want to know how much each parent owns.
Assets include things such as real estate, vehicles, jewelry, artwork, furniture, appliances, boats, planes, and even businesses. These items can be difficult to value because they have no set market price. Instead, they need to be assessed by a professional appraiser.
If you don’t know where to start, here are some tips to help you properly value your assets:
- Start by identifying the type of asset you own. This includes land, buildings, cars, trucks, motorcycles, boats, planes, etc. You can use online resources to identify the most common types of assets.
- Determine the age of the asset. Some assets become less valuable over time while others increase in value. If you owned a car 20 years ago, it probably isn’t worth nearly as much today. On the other hand, antique furniture can easily double in value.
- Identify the location of the asset. Is it located near water or within walking distance of public transportation? Does it have special features? Are there nearby schools, churches, hospitals, parks, malls, restaurants, etc.?
- Find out about recent sales of similar assets.
One of the biggest mistakes people make in a high-asset divorce is hiding assets. If you're thinking about concealing assets, take note: You could be committing fraud.
While it may be tempting to try to keep certain assets hidden from your soon-to-become ex, doing so can come back to haunt you later. For one thing, hiding assets is considered fraud. And even though you might think you are protecting yourself, there's no guarantee that your soon-to-ex won't find out anyway.
When a property is divided in a marriage, every asset must be listed. If it's discovered that you've concealed assets, you could be charged with perjury, or worse, you could be found guilty of fraud.
Not only could you face legal ramifications, but you could also risk losing credibility with the court, which might lead to you being awarded more assets in your soon-to-be ex's favor.
Because of this, it's critical, to be honest about your assets when listing them during your divorce proceedings. Otherwise, you could end up paying more money down the road.Hire an Attorney Experienced in High-Net-Worth Divorce
An experienced divorce attorney in Harris County, Galveston County, Fort Bend County, Montgomery County, Brazoria County, Houston, Sugar Land, Missouri City, and Stafford, Texas at Thornton Esquire Law Group, PLLC, can provide guidance and offer advice throughout the entire process. Contact us today at www.thorntonesquirelawgroup.com for a free consultation.