Divorce may be one of the least pleasant things you will ever have to go through. With so much at stake, you are probably feeling overwhelmed. Whether you are the one who requested the divorce, whether you have seen it coming for a while now, or even if you were blindsided by the divorce request, you are doubtless feeling unsettled and anxious.
The problem is, in situations where you are feeling stressed, you may be more likely to make mistakes. Whether you are reacting emotionally in the heat of the moment or making a choice because you do not know any better, mistakes made now may have long-lasting repercussions. This can be especially true in high-net-worth marriages where there are valuable assets at stake.
3 frequent divorce mistakes
Sometimes, in a rush to get the divorce finalized, couples hurry through the proceedings. When functioning in this manner, you may run the risk of letting your emotions get in the way of your ability to make informed, well-considered decisions. Some of the most common divorce mistakes include:
- Failure to account for assets
- Failure to consider tax consequences
- Acting out of guilt or anger
Failure to account for assets
In the heat of the moment, some spouses may be tempted to transfer funds in an attempt to conceal what they feel is rightfully theirs. Upon discovery, this can destroy one’s credibility in ensuing divorce proceedings. Regardless, in high-net-worth unions, at least one of the spouses may be financially savvy, meaning that the potential exists for difficulty in accounting for some of the marital assets.
Because of this, you may wish to spend money on an in-depth investigation, rather than simply accepting what your spouse tells you when it comes to the marital property. The cost of such an investigation now may be more than made up for later if the investigation uncovers such assets or funds.
Of course, omission could simply be a matter of oversight, which is why taking your financial inventory seriously could prove critical to your future. Ensuring all information on the financial affidavit is accurate can be time consuming and tedious, but failing to do so could leave you with unnecessary liabilities or lost assets.
Failure to consider tax consequences
Another critical part of any high net worth divorce is tax considerations. Will the assets you receive in the settlement be heavily taxed? Did you agree to an alimony amount based on a before-tax gross income, instead of a net budget? An attorney will be able to offer legal insight into unique tax issues for which you may not have accounted.
Acting out of guilt or anger
If you are the one requesting the divorce, you may be feeling guilty. The trouble is, a guilty spouse is often a spouse who ends up sacrificing more than he or she should in a divorce settlement. A good approach is to view asset division as a business dissolution, with decisions based on experienced legal counsel and not emotions.
Likewise, acting in anger is usually not an advisable approach, either. You feel wronged or hurt and want revenge. However, decisions based solely on a desire to lash out at your spouse may only serve to drag out the divorce proceedings, costing both parties more money and stress. Whenever possible, it may be best to allow your attorney to help you set aside your anger in an attempt to make the wisest decisions for your future. A good lawyer will fight hard for your interests without unnecessarily prolonging fights.
How can I avoid these mistakes?
It can be helpful to remember not to let your emotions run away with you. Arming yourself with information before reacting emotionally is often the key. Regardless of whether you are on the giving or receiving end of the divorce papers, good, unemotional legal advice can prove invaluable in avoiding costly mistakes in a high asset divorce.