Divorce is never pleasant or easy. Because your future is in the balance, the stakes are always high. This is especially true for high net worth individuals who are facing a divorce. When large amounts of complex assets are in play, the division of property can become confusing, and often gives rise to additional financial, legal, and tax considerations.
If you are getting divorced and either you or your spouse is a high net worth individual, it’s important to consult an experienced divorce attorney who will work to protect your rights. At the Law Office of Omar Gastelum and Associates, PLC, we are here to help you avoid some of the most frequent pitfalls that arise in high net worth divorces.
It may seem obvious, but when there are more assets at stake in a divorce, each party has more to lose, which causes some people to react impulsively, increasing the likelihood of making harmful mistakes.
As with any divorce, you should avoid letting your emotions influence your decision-making. Beyond that, however, there are some common and easily avoidable mistakes that tend to arise more often in high net worth divorces, including:
- Hiding Assets – When faced with the risk of losing a lot of money, some people think they can cleverly transfer their assets in order to avoid having them be divided during the divorce. This is never a good idea. Not only will an attempt to hide assets likely be viewed as fraudulent, it can also cause you to lose your credibility with the court, and along with it any leverage you might have had in future disputes. Hiding assets never works – you will almost surely get caught, and the ramifications are not worth it.
- Failing to Conduct an Investigation – This is the flip side of hiding assets. Often in high net worth divorces, one party is much more financially sophisticated than the other. If you are the less sophisticated party, you need to be sure that your spouse is not attempting to conceal assets from you. Conducting a proper investigation may cost money, but trusting that your spouse is telling the truth could cost you significantly more in the long run.
- Ignoring Tax Consequences – Taxes are always an issue in divorce proceeding, but when high dollar figures are at stake, taxes can have a serious impact. The assets and alimony payments you receive as part of the divorce settlement are subject to taxation, and if the payments are high, the amount of taxes could have significant consequences for your future budget. It’s crucial to know how much you’ll actually be receiving going forward.
- Improperly Determining Community vs. Separate Property – If you’re getting divorced in California, the division of your assets will depend largely on what is considered to be personal property as opposed to community property. Conducting an in-depth analysis of your complete financial portfolio to determine which assets are subject to division is the only way to get a true sense of what you stand to gain or lose in your divorce, and the only basis for forming the right strategy for approaching negotiations. Sometimes the distinction is not clear, and you may need to trace investments or contributions to community assets.
It’s Important to Consult an Experienced Divorce Attorney
Finding the right lawyer to handle your divorce is crucial to protecting your interests. High net worth divorces bring into play many sensitive issues that don’t often arise in ordinary divorces, and hiring a lawyer who is experienced in dealing with large dollar figures is critical to protecting your rights and interests.
The experienced divorce attorneys at the Law Office of Omar Gastelum and Associates are intimately familiar with the complexities of high net worth divorces. If you are facing a divorce with large amounts of assets on the line, contact us today to discuss the best approach to your divorce negotiations.