When couples with high net worths undergo a divorce, it is common for matters to quickly become heated and to involve a number of complex legal issues. One of the most complicated issues involved in this type of divorce is determining the types of assets owned by the couple, deciding which assets are joint or separately owned, and figuring out the amount to which each spouse is entitled.
Making Emotional Decisions
Even in high net worth divorces, it is common for one spouse to feel guilty. In these situations, the guilty spouse sometimes make poor decisions fueled by emotions. Rather than approach matters emotionally, it is a better idea to treat divorces as the dissolution of a business contract and to take as much emotion as possible out of the end of your marriage.
Rushing Matters to Conclude the Divorce
Many spouses claim that they want a divorce as fast as possible because they have met someone else. Unless physical violence is involved, it is not a wise idea to rush a divorce. When spouses do decide to divorce, they commonly make great financial mistakes that can have a lasting impact even after the divorce is finalized.
Failure to Consider Tax Consequences
Obtaining a divorce can have a number of substantial tax consequences for high net worth individuals. If you are the receiving spouse and agree to a certain amount of spousal support, it is important to not forget that you have to pay taxes on alimony. If you decide to keep your 401(k) and plan on keeping some of this money, it is critical to remember that withdrawals are taxed as ordinary income and are subject to a federal tax penalty if taken before the age of 59 ½.
Not Fully Understanding Assets
In many high net worth marriages, one spouse often earns a substantial amount more than the other. Many times, the wealthier spouse has a much more in-depth understanding of their financial affairs than the other spouse. It is critical for the lower-earning spouses to understand money upfront and to discover whether there are any assets about which they were not aware.
Complex Issues Involving Companies
One of the most complex issues involved in high net worth divorces is how the divorce will impact the value of companies owned by one or both of the spouses. Some of the most common complex issues that can affect companies during a divorce include influencing the concentration or energy levels of a business owner as well as the business owner’s approach toward risky activities. Additionally, due to divorce, business owners can sometimes face additional tax implications and a host of other complex legal issues.
Speak with an Experienced Divorce AttorneyIf you are facing divorce and have a large number of assets, it is critical to obtain the assistance of a divorce attorney who understands how to best navigate these complex issues. Contact Vayman & Teitelbaum P.C. to schedule an initial free case evaluation.