Mistakes to Avoid in a High Net Worth Divorce
Going through a divorce often involves division of marital property, which can be difficult no matter how much the spouses possess. But for wealthier couples, property division is far more complicated. There is more to value and more to divide and the fight over these assets can be more contentious. You need to be extra vigilant to avoid common mistakes in a high net worth divorce.
The dissolution of any marriage with over $1 million in assets is considered a high net worth divorce. However, as inflation continues and housing prices rise, the definition of high net worth is likely to climb in value. These cases are especially complicated if one spouse is in a higher financial standing than the other – such as when one spouse earns substantially more or owns more properties.
Although Arizona divorce law protects spouses no matter their financial situation, a high net worth divorce requires heightened caution for those involved. The following are major mistakes you need to avoid:
- Hiding assets during the divorce — Some spouses may be tempted to stow away some of their assets they think they should be entitled to keep. Hiding assets in a divorce is illegal and doing so can result in significant penalties, including potential jail time. What’s more, your property settlement may be invalidated by the court if the assets are uncovered.
- Dissipating wealth with large purchases — A spouse may be tempted to spend large amounts of money on extravagant purchases to reduce the value of divisible marital property or, alternatively, to demonstrate their expensive lifestyle in an effort to qualify for higher spousal support. Such transactions are suspect and can demonstrate bad faith. The spouse that takes such actions most likely will answer for them in the financial settlement.
- Not considering taxes — There are important tax implications in a divorce, especially for those with high-value assets. Property taxes on a lavish home can be a major factor in determining a fair property settlement, as can the potential taxability of tax-exempt properties upon transfer.
- Immediately accepting a settlement offer — Too many divorcing spouses immediately accept a settlement offer that looks fair on the surface. They are tired of fighting and just want the whole thing over with. However, the settlement offer could be very one-sided and could negatively affect your interests.
- Trying to complete the divorce on your own — High net worth divorces typically involve complex assets, such as business ownerships, investments, pension and retirement plans and expensive items like luxury cars, boats, artwork, antiques and jewelry. They can be further complicated by prenuptial agreements. You need a qualified Arizona divorce attorney who understands high net worth divorces and how to protect your rights.
At Clark & Schloss Family Law, P.C. in Scottsdale, we have wide experience representing spouses in high net worth divorces throughout Arizona. Contact us online or call 602-789-3497 for a free initial consultation.