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Protecting Your Wealth in a High-Asset Divorce
They say the person you marry is not always the same person you divorce. This is because not all divorces go smoothly. And when high assets are involved, things can become even more complicated. In this article, we’ll identify some of the most common mistakes in a high asset divorce.
For this reason, it is important to avoid common mistakes to protect your rights and interests. Speaking of mistakes, here’s what you need to watch out for.
Top Mistakes in a High Asset Divorce
Not Gathering Financial Information
Before you begin the divorce process, you should gather all relevant financial information, including bank statements, investment accounts, and real estate holdings. Failing to gather this information can lead to an incomplete understanding of your financial situation and may result in an unfair division of assets. The last thing you want is to end up paying more than you owe or receiving less than you deserve.
Not Valuing Assets Correctly
You should also have a clear understanding of the value of all assets. This includes but is not limited to real estate, investments, and business interests.
Hiding Assets
Depending on the dynamics of your marriage, you may be tempted to hide your assets. After all, we are all human. But that’s not how the law in Maryland or any other state sees it.
Hiding assets from your spouse or the court is illegal and can result in severe legal consequences. Take, for instance, a situation where you are required to testify under oath about your property ownership. In that case, if you lie, you may be charged with perjury.
In Maryland, the penalty for perjury is up to 10 years in prison and a fine of up to $250,000. To avoid such consequences, it is important to be transparent about your financial situation and disclose all assets during the divorce process.
Not Seeking Professional Advice
High-asset divorces can be complex, and it’s important to seek the advice of a skilled family law attorney. The attorney will ensure that your rights and interests are protected.
Making Emotional Decisions
You should approach a high-asset divorce with a clear and level head and avoid negotiating from a position of anger or emotion. This can lead to hasty decisions that may not be in your best interest. It is also one of the reasons most people hire attorneys to represent them in such negotiations. Experienced attorneys will always prioritize their client’s best interests over their emotions.
Ignoring Possible Tax Consequences
The division of assets in a divorce can have significant tax consequences. For example, in cases where a rental property is involved, the individual receiving the property will need to report it in their income. Failure to do so could result in harsh penalties by the Internal Revenue Service (IRS). Therefore, it is advisable to consider these consequences before finalizing any agreements.
Overlooking the Impact on Children
High-asset divorces can significantly impact children. For this reason, you should consider their well-being and future needs when negotiating the terms of divorce.
Avoiding these common mistakes can increase your chances of reaching a fair and equitable settlement in your high-asset divorce. All said and done, the best way to avoid these mistakes is by consulting an experienced family lawyer from Divorce With a Plan. The law firm serves clients in Montgomery, Baltimore, Howard, Anne Arundel, and Prince George’s counties.