If you are approaching a high net worth divorce in Charlotte or surrounding cities, you may be worried about a number of potential issues. This is understandable, as the stakes are much higher when you are dealing with one or more spouses who have an extremely high net worth. Depending on where you stand in the divorce, you may have a lot to lose, or perhaps you have a lot to gain. In either situation, you need to approach your divorce carefully. Becoming aware of common mistakes made by spouses in high net worth divorces is the first step.
Although a little bit of internet research is certainly not a bad thing, you will want to rely on a qualified, experienced divorce attorney to guide you through some of the trickier steps. These legal professionals can employ a number of effective tactics in high net worth divorces. These methods can help you walk away feeling content with everything that has been agreed upon. Skilled divorce attorneys are also well aware of the many potential mistakes and pitfalls couples make in high net worth divorces, and they can help you avoid them with ease.
Trying to Hide AssetsOne of the most common mistakes couples make is to try and hide their assets. While some crafty spouses can get away with this in very rare scenarios (like hiding cash in a safety deposit box), it is almost always going to backfire on you. No matter how badly you want to keep hold of your assets, you should never attempt to conceal them. If you engage in this behavior, you will be breaking the law in North Carolina. When you get married, you and your spouse have something called a fiduciary duty to one another. This is a legal obligation to disclose all financial information to your spouse.
Violate this fiduciary duty, and you will essentially be guilty of defrauding your spouse. The negative impact on your divorce proceeding could be severe. First of all, you will probably be required to pay for your spouse’s legal fees. Secondly, your attorney may choose to stop representing you out of frustration. Finally, you will lose all credibility in the eyes of the court. Nothing you say will be taken seriously from that point on, and you will likely receive the “short end of the stick” when your divorce is finalized. In short, it simply is not worth it to try and conceal your assets in a high net worth divorce.
Commingling Your Separate PropertyAnother common mistake that spouses make is commingling their separate and marital assets during the marriage. This leads to a bit of a headache, as these different assets must then be analyzed and “unraveled” so that the divorce court knows which assets are eligible for equitable distribution. Separate property is not distributed, but marital property is.
Separate property is any asset you accumulated before the marriage, or something like inheritance, which is always separate. Marital property includes assets that you accumulated during your marriage, like the purchase of a house. So, what happens if you put the proceeds of an inheritance cheque towards the down payment of a house during your marriage? These two types of property become commingled, and this complicates the divorce proceedings.
Assuming That Investments Will be Divided EquallyDo not assume that your investment portfolio will be divided equally during a high net worth divorce. Wealthy couples often have significant sums tied up in a variety of financial products, including stocks and dividends. Financial experts and court representatives will analyze these investments on a case-by-case basis before distributing them. They will assess many factors, including the risk factor of each investment.
The goal is not necessarily to leave each spouse with an equally valued investment portfolio, but rather an investment portfolio that is equitable. This means that both spouses will likely end up with a portfolio with the same general risk factors. The intention here is to make sure that each spouse can depend on at least some of their investment assets to have a stable, non-fluctuating value.
Enlist the Help of a Qualified Divorce Attorney TodayAlthough approaching a high net worth divorce in Mecklenburg County or the surrounding areas can be unnerving, there is help available. With the assistance of a qualified, experienced divorce attorney, you can tackle your divorce in a confident, efficient manner. These legal professionals can help you steer clear of a number of common mistakes. Although a divorce can be tricky, there is no reason you cannot walk away feeling content and ready to face the next chapter of your life. Reach out to Arnold & Smith, PLLC today, and we can help you do just that.