There’s a well-known song that argues that more money means more problems. While this isn’t always true, a higher net worth can make getting divorced more complicated.
Any split that involves significant inheritances, trusts, businesses, real estate, investments, retirement accounts, or collections is considered a “high asset” or “high net worth” divorce. If you’re considering a divorce and meet these qualifications, you will likely face some unique complications. At a minimum, couples with significant assets may be more likely to argue about dividing them fairly in their split.
These complications can make your divorce longer and more stressful. However, proper preparation can help you avoid some of the most common mistakes in high net worth divorces and keep things on track. Here’s what you need to know about the most common issues in high asset splits, the mistakes you should avoid, and what to do instead.
The Complications of High Asset Divorces
Every relationship has its problems, but ending a high value marriage mixes finances with your personal life. That combination of money and emotion is a recipe for disagreements. Some of the most significant issues that come up in high value divorces include:
- Asset Valuation: High net worth couples are more likely to own property that’s difficult to place a number on. The value of items like luxury real estate and art collections can be subjective. Meanwhile, businesses, RSUs, and pensions have monetary value but require careful thought to divide fairly. This can make splitting the assets fairly more time-consuming.
- Asset Division: In addition, more assets present more opportunities for couples to disagree about how to split their marital property. People are prone to forming attachments to family businesses, intellectual property, and real estate, making it harder to sell or divide them equally.
- Spousal Support: In high net worth relationships, one partner likely earns significantly more than the other. This can make spousal support a significant point of contention, especially if one person sacrificed opportunities to support their high-earning spouse.
- Child Support: Similarly, child support can lead to disputes if one partner believes the other partner is trying to undervalue assets or earnings to reduce their monthly obligations.
You may face some or all of these concerns in your own split. You must be prepared to handle them, or your divorce may take significantly longer than you’d like.
What to Avoid In Your High Net Worth Divorce
The possible issues involved in high asset splits provide more opportunities for mistakes. While tensions can run high during any divorce, preparation and a professional approach are particularly important in high value divorces. Below are three of the most common mistakes that occur in these situations and what you can do instead to avoid them.
Don’t: Be Dishonest
The first step in any divorce is exchanging complete financial disclosures with your partner. These disclosures ensure you’re both aware of all the property that may be involved in your split. It also provides a basis for determining spousal and child support orders if necessary.
When you own a lot of property, leaving out some items or accounts from your disclosure can be tempting to keep them for yourself or receive a more favorable support order. This dishonesty isn’t just unethical, though. It’s against the law. If it’s found that you’re purposefully concealing assets in your split, you could face serious legal penalties and trigger a time-consuming and costly audit.
Instead: Be Meticulous
The more thorough your financial disclosure, the better. When you take the time to produce an accurate and comprehensive disclosure, you ensure there are no grounds for an accusation that you’re concealing property.
Thorough disclosures also make it easier to determine if property is eligible for division. Meticulously prepared disclosures make it easier to argue whether an asset should be considered joint or separate. As a result, you have a better chance of legitimately keeping your separate property out of consideration during your divorce.
Don’t: Make Impulsive Decisions
Divorces often lead to strong emotions, making it harder to think rationally about your choices. If you’re upset or angry with your spouse, you may make impulsive decisions about assets or legal matters to “punish” them. However, the complicated nature of high value divorces can make these hasty decisions a much bigger problem.
For instance, some people choose to fight for assets they don’t actually care about because they know it would hurt their partner to lose them. Others pursue litigation instead of mediation to force their partner to face more stress. Spur-of-the-moment decisions like this will make the process longer and more difficult for you, too.
Instead: Make a Plan
The best way to avoid impulsive battles with your spouse is to have a plan for your split. Take some time when you’re feeling calm to make a priority list for your divorce. Identify what matters most to you, such as:
- Retaining ownership of specific assets like a business, home, or investment account
- Keeping the process efficient and low-stress
- Making things easier on your children
When you know what’s most important to you, you’re less likely to get distracted by the small details. You’ll be able to build a plan for how you’ll negotiate and make compromises. As a result, you’ll have a better chance of pursuing the goals that matter most to you without dragging things out.
Don’t: Handle Things Alone
Some people assume adding extra people to a legal matter will make it take longer. These people try to handle as much of their divorce on their own as possible. They avoid bringing in experts and professionals because they think doing things independently will be faster and less costly.
That’s rarely true in divorce. Handling things alone is a recipe for making mistakes and wasting time and effort. A high-asset divorce is the last situation where you should try to do everything yourself.
Instead: Get Professional Help
Build a team of experts to help you move your divorce forward. Start with an experienced high asset divorce attorney. Lawyers with experience assisting high net worth couples end their marriages have the knowledge and skills to keep things on track for you.
They will also help you determine which other experts you should add to your team. Depending on your situation, they may recommend you work with:
- Specialized business, investment, real estate, or collection appraisers to determine the actual value of unique assets
- Forensic accountants to track down all assets in your marriage
- Vocational evaluators to identify how much spousal support should be awarded
- Parenting responsibilities evaluators to provide recommendations on child support and custody to the court
These professionals will help you and your attorney build a strong case for your split. Working with the right team can streamline the process, reduce the chance of mistakes or disputes, and save you time, resources, and stress in the long run.
A high asset divorce can be particularly stressful. When you understand the potential pitfalls and problems you may face, you can reduce the likelihood of delays, miscommunications, and disputes. An experienced high net worth divorce attorney will help produce thorough financial disclosure, develop a plan for your split, and ensure your divorce is handled efficiently regardless of the amount of assets involved.