In High Asset Divorces, Know Thy Assets
High asset divorces work similarly to normal divorces, with two main differences.
First, there’s obviously a lot more at stake—often in the millions of dollars.
Second, there is a lot of unusual complexity. Owning many assets means they are spread out, among other things, across bank accounts, real estate, stocks, businesses, and retirement funds.
So, should you approach your high asset divorce like a normal divorce? Yes and no. Yes, in the sense that the process will be similar. No, in that you will need to be more meticulous about certain key steps.
Here are a few specialized tips that apply to high asset divorce cases.
Know everything you can about your assets.
This is true no matter who owns or controls the assets, and especially true if you jointly own your assets. In most marriages, it’s rare to find two spouses who equally understand the complexity of their assets (although it does happen). As a result, you will want to do the following:
- Perform an “audit” of the assets. You don’t want to mess around here. Hiding assets or not knowing the full details about your spouse’s assets will hurt you in your divorce case. You need to perform a thorough “audit” of sorts to make sure you’re not missing anything.
- Hire an expert to help. Some attorneys will have accountants and valuation experts to help out in your divorce case. You can also hire a valuation expert separately whose job is to evaluate your assets as well as your spouse’s to get as accurate a picture possible.
- Don’t overlook commonly forgotten assets. This could include anything from life insurance to intellectual property to credit card rewards. An expert will make sure you don’t miss things that you may not consider assets.
Attempt to come to an amicable agreement.
It’s not recommended that you fight out a high asset battle in court. Even with the best attorneys, a court battle exposes your financial situation to the public, leads to ugly fighting, and potential public embarrassment. There are a few ways to avoid a legal fight.
- Sign a prenuptial or postnuptial agreement. We know. Signing a prenuptial agreement might seem like you don’t really love your future or current spouse. However, look at the statistics. About 50% of marriages end in divorce. Would you flip a coin over keeping or losing your assets? A prenuptial or postnuptial agreement allows you to amicably define what happens to assets in case of a divorce.
- Go through mediation and come to a settlement. If possible, even if you know you’re headed for a divorce, try to sit down and work out an agreement. Get attorneys, accountants, and valuation experts to help if you need them. A settlement agreement will more likely benefit both you and your spouse when compared to letting a judge decide how to split your assets.
Account for assets that will negatively impact your lifestyle.
Don’t look at a high asset divorce like a cash grab. So what if you get half of a business or the vacation home. Are you prepared to pay taxes on any of those assets? Are you equipped to help run and shoulder the responsibility of operating a business? What if an asset suddenly saddles you with debt or you lose a great deal of value in an economic downturn? How will taxes or transaction costs affect the value or availability of an asset? Prepare for a variety of scenarios and outline the indirect financial consequences of the assets that you will own after a divorce.
Hire an attorney who stays realistic, positive, and objective.
What’s one way that high asset divorces are exactly like normal divorces? Emotion. You or your spouse—despite your millions of dollars in assets—may still feel anger, betrayal, depression, fear, anxiety, and guilt. You may want to “punish” your spouse and “take them for all they are worth.” With this attitude, you may hire a bad attorney who buys into your fantasy and acts too aggressive.
Instead, your attorney should remain calm and objective. Sure, they should listen to you, empathize with your particular situation, and be on your side throughout the entire process. At the same time, they need to know what final agreement will best meet your needs. If you meet your goals, then you’ve “won.” You don’t need to punish or further aggravate your spouse to do that. An experienced, good attorney will focus on your options, collect all of the data about your assets, and come up with a reasonable path that leads to success—whether it’s through settlement or a trial.
If you have any further questions about assets or are looking for an attorney for your divorce case, call us for a consultation.