Regardless of the circumstances, divorce can create an expensive toll on each party's emotions and finances, especially in a high-net-worth divorce. When a divorcing couple has a large amount of property, income, and assets, the stakes become a lot higher.
Because high-net-worth divorces involve a substantial amount of assets, they are naturally more complicated. Dividing property in a high-asset divorce requires a carefully crafted strategy. Without a plan in place, costly mistakes are more likely to occur. To protect your rights and property in a high-net-worth divorce, keep the following in mind.
Don't Make Emotionally Charged Decisions
When emotions run high, it's entirely too common to make rash decisions without considering the long-term implications first. In the event of an emotionally driven decision, you could end up agreeing to give up more property than you deserve, which can lead to long-term financial stress. While you might think your choice will make your life easier at the moment, it could lead to a more time-consuming and emotionally draining fight in the future.
High-net-worth divorces can quickly get heated. Don't attempt to lash out at your ex or punish them for the pain they have caused you. Instead, think about how you would react if this were a professional setting. When handling business matters, you want to be calm, informed, and have a plan in place. In a divorce, the same logic applies. If you struggle to put your feelings aside, it's essential to seek guidance from a skilled divorce attorney. Your high-net-worth divorce lawyer will help you make strategic and knowledgeable decisions that protect your best interests.
Do Correctly Identify Assets
In any divorce, assets must be characterized into separate or community property. Only property that is community property can be divided in the divorce. For high-asset couples, this process can become slightly more complicated.
A business owner, for example, might have owned the business prior to the marriage, making it separate property. However, during the course of the marriage, community property was used to increase the value of the business. The business has now been commingled with community property and likely subject to division in a divorce.
It can be difficult knowing if an asset will be considered community or separate property, which makes it vital to have an expert on hand to help categorize it. Not correctly categorizing the type of asset could lead to an unfair settlement of property.
Do Properly Value Your Assets
Assets also need to be valued to determine their worth in order to ensure a fair division of property. Often, when individuals own luxury or high-value assets, they will seek a third-party assessor to determine the value of their assets.
Sometimes more than one financial assessor will be needed depending on the type of asset. For property like antiques, fine art, collectibles, and more, they will need to find someone that specializes in determining the book value of those types of assets. Conversely, to determine the worth of a business, you could need an entirely different financial expert.
Not all spouses will agree with the valuation estimate, and major disputes could arise. In this case, a judge could ultimately be put in charge of assigning a dollar value and dividing that value between the spouses.
Don't Hide Assets
One of the biggest mistakes people make in a high-asset divorce is hiding assets. While it may be tempting to hide some assets that you don't think the other party deserves, it can backfire on you because it is considered fraud. When property is divided in a divorce, every asset must be disclosed. If it's discovered that you hid assets, you could be held in contempt of court or found guilty of perjury due to your attempts to conceal assets.
Not only could you face legal repercussions, but you could also lose all credibility with the court, and the judge may then decide to award more assets in your soon-to-be-ex spouse's favor. Because of this, it's crucial to be transparent about your assets when disclosing them in your divorce.
Hire an Attorney Experienced in High-Net-Worth Divorce
Getting a divorce is already a stressful situation. Adding in complex property division matters to your divorce can add to your feelings of uncertainty about your future financial security. One of the best things you can do to protect yourself from costly mistakes in a high-net-worth divorce is not seeking experienced legal counsel.
At Gille Kaye Law Group, PC, our Pasadena divorce lawyers are dedicated to winning maximum monetary awards and protecting your best interests. Our team includes a Certified Family Law Specialist that can handle complex asset division in high-net-worth divorces. Not only can we help uncover hidden assets, but our Pasadena divorce attorneys can assist in valuing your assets to make sure you receive a favorable outcome in your divorce.
Contact Gille Kaye Law Group, PC today at (626) 340-0955 for compassionate counsel and for help protecting your future.