4 Mistakes to Avoid in a High-Asset Divorce

A high-asset divorce is one that typically involves one million or more in assets that are subject to division. While many couples who have high net worth might enter into a prenuptial agreement before the marriage, this document might not exist if the wealth was recently acquired. If a prenup hasn’t already determined how your property should be split in your high-asset divorce case, it’s crucial to avoid several common mistakes throughout the process.

1. Hiding Your Assets 

During the divorce process, both spouses are required to disclose their assets. In fact, one of the first documents that must be filed with the court is a “Statement of Net Worth.” In a high-asset case, you might be tempted to conceal some of your assets in order to prevent sharing them with your soon-to-be ex-spouse. However, this would be a big mistake that could seriously impact the outcome of your case. 

Hiding assets during divorce is not only fraudulent, but it is also illegal. If your spouse’s attorney or a forensic accountant discovers these assets, the consequences can be severe. In such cases, you could end up spending much more in litigation expenses than you would have had you disclosed the assets. The judge could also order you to give a larger portion of assets to your spouse than they would have received but for the concealment.  

2. Rushing into a Settlement

It’s never a good idea to rush into a settlement agreement with your spouse. As much as you might want to get the divorce process over with, signing a settlement before you have taken the time to understand your rights and carefully consider your options can be an egregious error with long-term consequences. Without reviewing your settlement agreement with an attorney, you might be forgoing assets you are legally entitled. 

3. Not Working with an Experienced Divorce Attorney

Not working with a knowledgeable divorce attorney from the outset of your divorce case is a serious mistake — especially if your divorce involves a substantial amount of assets. It’s important to have an attorney who can guide you through the process, advise you regarding your legal and financial rights, and prevent you from making costly errors in your case. An attorney may also be able to negotiate a more favorable outcome in your case.   

4. Disregarding the Potential Tax Consequences

There can be many tax consequences to consider in divorce, particularly in cases involving a significant amount of property and assets. For instance, property transfers resulting from divorce can have a number of tax implications if they are not structured properly. Additionally, New York State tax law treats alimony differently from federal law. You should discuss these matters with your accountant — as well as how changing your tax filing status might impact your taxes moving forward.

Contact an Experienced New York Divorce Attorney

If your divorce involves substantial assets, the stakes are high. It’s critical to have a skillful divorce attorney who can assist you with navigating the divorce process and safeguard your rights. The Edelsteins, Faegenburg & Brown, LLP provides compassionate counsel and adept advocacy for divorce matters in New York and is dedicated to ensuring a favorable outcome for each client. Call (212) 425-1999 to schedule a consultation.