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When a couple ends their marriage in divorce, separating their lives from each other can become very complicated. The process will require the resolution of a number of issues, including determining how to divide property, allocate parental responsibility, and calculate the amount and duration of child support or spousal maintenance. When couples have a large amount of assets, the complexity of these matters can increase exponentially, and mistakes made during a high net worth divorce can have long-lasting consequences. During a high asset divorce, couples should avoid making these mistakes:
Not hiring a financial advisor. A high net worth divorce often involves a number of complex financial issues, including real estate, business valuation, and pensions, investments, and retirement accounts. In order to gain a full understanding of what both spouses own, earn, and owe, a financial expert’s assistance is often required. By consulting with a financial advisor at the beginning of the divorce process, couples can avoid unexpected complications and resolve financial issues as smoothly as possible.
Hiding assets. Spouses in high net worth divorces may try to transfer some of their assets to a child or relative to avoid dividing these assets with their spouse, or they may try to keep from disclosing the full extent of their earnings in order to reduce the amount they will pay in child support or spousal support. Attempting to hide assets is not only illegal, but spouses who try to do so will lose their credibility and be at a disadvantage in any disputes that arise during the divorce process. It is important to provide accurate, complete financial information during divorce, which will allow the process to be completed more quickly and efficiently.
Not considering taxes. Both spouses’ taxes will be affected by a divorce, and couples with a high net worth will have additional considerations to take into account. In addition to determining each spouse’s filing status and exemptions, couples will also need to consider issues such as capital gains, whether any of their benefits are considered taxable income, taxes on spousal support, and taxes on any assets that were transferred between spouses during the divorce. A financial advisor will be able to help couples understand how their taxes will be affected during divorce.
Not using a premarital/postmarital agreement. A prenuptial or postnuptial agreement can help spouses in high net worth marriages understand how issues such as business ownership, financial assets, and inheritances will be handled during divorce. Having this type of agreement in place can keep a divorce from becoming costly and complicated.
Agreeing to demands too quickly. Divorcing couples are usually ready to get out of a negative relationship and move on with their lives. This eagerness to finish the process often leads a spouse to capitulate to their former partner’s demands. However, once agreements over issues such as property division, child custody, child support, or spousal maintenance are in place, they are difficult to change. Spouses should be sure they understand what they are agreeing to and consult with their attorney to ensure that their rights are being protected.
Contact an Experienced DuPage County Divorce Attorney
In cases of high net worth divorce, it is important to have an experienced, knowledgeable attorney on your side to help you understand the legal and financial aspects of your divorce and advocate for your rights throughout the process. The Hinsdale divorce attorneys at Martoccio & Martoccio can help you survive your divorce while protecting your assets and your family’s financial interests. Call us today at 630-920-8855 to schedule a consultation.