A high-net worth divorce can become very complicated, stressful, and contentious. Spouses in a high-net worth divorce may have significant marital assets and multiple sources of income, which makes the process of dividing property and finances more challenging and complex. Individuals in a high-net divorce may not understand all the nuances and financial complications of ending a marriage, which is why many spouses make irreversible mistakes that have lifelong consequences. It is essential to know what not to do in a high-net worth divorce to ensure a favorable outcome and not have any regrets after the divorce is final. The compassionate and dedicated divorce attorneys at Simpson Legal Group, LLC, have been helping individuals and families in Iowa settle their family law issues for over two decades. Call 712-256-9899 to get assistance with navigating a high-net worth divorce.
What Is a High-Net Worth Divorce?
The definition of a high-net worth divorce may vary. However, the traditional definition of a high-net divorce is any divorce that involves more than $1 million in liquid assets. While high-net worth divorces involve many of the same legal requirements and procedures as a divorce with little assets to divide, the process of dividing property between high-need individuals is usually more complicated.
According to researchers, the more money is involved in a marriage, the more challenges arise between the spouses. Research by the Federal Reserve Board showed that the greater the mismatch between the spouses’ credit scores, the more likely they are to file for divorce within the first five years of marriage.
Mistakes to Avoid During a High-Net Worth Divorce
Many people are unsure of how a high-net worth divorce is different from any other divorce. As a result, they may make mistakes during the divorce proceedings. Those mistakes can carry long-term consequences, affecting many areas of the spouse’s life. Below are some of the most common mistakes people make in high-net worth divorces:
1. Agreeing to All of the Other Spouse’s Terms for Divorce
Many spouses want to finalize their divorce and put it behind them as soon as possible, which is why they are willing to agree to all of their spouse’s terms for the divorce. However, it is critical to understand the consequences of signing the divorce settlement agreement. It is not uncommon for individuals in high-net worth divorces to agree to less than they are entitled to under the law. The negative impact of agreeing to the spouse’s terms for divorce without determining a fair settlement could haunt the individual for the rest of their life.
2. Assuming That All High-Net Worth Divorces Are Contentious
Not all divorces that involve significant assets and finances are contentious. In fact, many high-net worth individuals are able to resolve their divorce amicably without engaging in a long, drawn-out battle in court. An experienced family law attorney may be able to assist individuals with resolving a high-net worth divorce out of court, minimizing legal fees and litigation costs.
3. Not Looking for Hidden Assets
As a rule of thumb, the more assets are involved in a divorce, the more reasons a spouse has to potentially hide assets from their spouse to keep more property to themselves. The law requires spouses to be completely honest and transparent about their assets and income when filing for divorce. However, there are many techniques high-net worth individuals might employ to hide assets during a divorce to prevent their spouse from getting a fair settlement. An experienced divorce attorney at Simpson Legal Group, LLC, can explain where to look to find hidden assets and ensure that all property is properly accounted for during a high-net divorce.
4. Attempting to Hide Assets
Many spouses cannot resist the temptation to hide certain assets during a high-net worth divorce. That is why a spouse may not be straightforward about their assets, income, or debts when seeking a high-net worth divorce. In fact, hiding assets in a high-net worth divorce can be easier, especially if it involves so many assets that it becomes challenging to keep track of all of them. Additionally, there are more and more ways to hide assets, such as within digital assets such as cryptocurrency. However, attempting to hide assets before or during a divorce may amount to a crime, resulting in severe penalties.
5. Not Knowing How Property Is Divided
Distinguishing between separate and marital property becomes more challenging when a divorce involves significant assets that have been commingled, especially if a marriage lasted many years or decades. According to the Iowa State Bar Association, Iowa is an equitable distribution state that divides a married couple’s assets acquired before or after the marriage. The only exception to the equitable distribution rule is if the property was received through inheritance or gift.
6. Neglecting a Professional Evaluation of Assets
Neglecting to conduct a professional evaluation of assets is also overlooked by may spouses during the divorce process. Unless the financial evaluation is performed by a professional appraiser, the spouses may not know the full value of their assets, which makes the process of dividing assets more challenging. Understanding how much the assets, including real property, automobiles, businesses, and other financial accounts are worth is vital to ensure an equitable division of those assets.
7. Not Seeking Counsel from a Divorce Attorney
Each high-net worth divorce involves many unique challenges and nuances that often makes it more challenging to navigate the entire divorce process. Many individuals going through a high-net worth divorce seek legal counsel from an experienced divorce attorney to protect their assets and rights during the complex proceedings.
Learn How the Experienced Divorce Attorneys at Simpson Legal Group, LLC Can Help You With Your High-Net Worth Divorce
Navigating a high-net worth divorce can be confusing and stressful, which is why many individuals choose to secure legal counsel to protect their assets and fight for the most favorable outcome possible. The knowledgeable and dedicated divorce attorneys at Simpson Legal Group, LLC, provides clients with the necessary insight and resources to assist them throughout the high-net worth divorce. Our experienced legal team can explain what not to do in a high-net worth divorce and we are committed to helping clients ensure their legal and financial rights remain protected. Contact (712) 256-9899 to schedule a case review today.