When it comes to divorce, there is no such thing as a simple one. However, the real unfortunate reality is the more you have, be it as a couple or an individual, the more complicated it is going to become. Whether one party has vastly more financial resources than the other, or you own a substantial amount of real estate or a successful business together, it is all going to cause complications in an otherwise emotionally charged separation. For this reason, when you are preparing for a high net-worth divorce, you need to take a number of precautions to protect what is yours.
Assess the Financial Lifestyle of Your Marriage
Before filing, you should go to lengths in order identify the financial lifestyle of your marriage as well as to identify individual and marital assets. Only with completely awareness of your assets and how both parties lived during a marriage can you anticipate any issues and have your attorney limit your asset division. Knowing how your spouse lived financially will also help you to anticipate any alimony as well.
Don’t Ignore the Tax Consequences
With everything going on in a divorce, couples often neglect another huge consequence – taxes. When you separate, the income that one spouse is paying and another is receiving can create significant new taxable cash flow that may end up making your divorce even more costly when tax time rolls around. While it may be unpleasant, you and your soon-to-be ex-spouse should contact your accountant and work closely with them to identify the potential tax implications of your split. If you can’t make this work, it could mean you both will have to endure a substantial loss after the divorce to the IRS.
Take the Appropriate Steps in Your Business
In many high net-worth divorces, one or both parties are business owners, which means that the owner will need to take steps to protect their business interest from the divorce. One of the best ways to prevent interference from a non-titled spouse is to enter a shareholder agreement clause that limits the transfer of stock through divorce. This will often allow the owners of the business or those who invested a significant amount into it to retain their stake in the company so it is not split with their ex-spouse.
Don’t Be Afraid to Settle
The major benefit of those engaging in a high net-worth divorce is the fact that they can afford it. For less well off individuals, both parties will often struggle financially with the split. This makes things often more vicious as both parties try to receive or retain their money. This means that financially strong individuals can often save a substantial amount by staying out of messy court battles and amicably agreeing on a settlement. This involves more long talks, but ultimately less wasted money if the two parties can agree on the division of assets.
Consult Financial Advisors and Estate Planning Attorneys
If you want to retain the majority of your assets, then it is beneficial to get all of your people in one room. This means gathering your financial advisor, estate planning attorney, and divorce lawyer in one room so you can all talk over your assets. The major benefit of this is that everyone has their specialties. Financial advisors will be able to give advice on how to protect your investments while your estate planning attorney can protect your estate and your divorce lawyer can bring it all together. This way you can look over all your assets and identify what you might lose and what you definitely don’t want to lose.
If you are a high net-worth individual preparing for divorce in Minnesota, contact us today. The Law Office of Beckman Steen & Lungstrom, can help you get through this distressing time with the least amount of loss possible.