When a marriage involves significant assets, the division of property during a divorce can be highly contentious. Emotions, that are rarely just about the property, often come into play that can make reaching a settlement more challenging.
However, it is important to approach the situation calmly and thoughtfully to avoid losing assets to which you are entitled. Learn more about common mistakes people make in high-asset divorces and what you can do to avoid them.
One of the top mistakes people make in high-asset divorces is attempting to hide assets. Many spouses believe that property that cannot be found or is not officially in their name cannot be divided in a divorce. However, transferring assets to another party, hiding them, or trying to claim they were lost almost always backfires.
If your spouse suspects you are hiding assets in a divorce, their divorce attorney can file a motion that forces you to disclose specific information which will actually help them uncover these assets.
If this deception is discovered prior to the divorce being finalized, you will lose credibility with the court and will almost certainly lose the asset. If it is discovered after the divorce, the divorce decree could be set aside for fraud, and your spouse could receive three times the value of the assets you concealed. Therefore, hiding assets is never worth the risk.
Forgetting to Include Intangible Assets
When disclosing assets during the divorce process, it is common to include homes, properties, vehicles and artwork. However, it is equally important to include intangible assets that have a high value, such as cryptocurrency, intellectual property, stock options, savings bonds, burial plots and the goodwill in a business. An experienced family law attorney will make sure you consider every asset when making your inventory of marital property.
Agreeing to a Settlement Too Soon Because You Want to Move On
Divorces can be long and emotionally draining processes, and both parties often want it to be finished as quickly as possible. No matter how eager you are to close the door on this chapter of your life, you should never agree to an unfavorable settlement simply because you are in a hurry to move on.
Negotiating assets in a divorce can involve a lot of back and forth; invest the time to be certain you are not agreeing to anything you will later regret when clearer heads prevail. The divorce process is not going to last forever, but your property settlement will impact your finances for the rest of your life.
Asking for Too Much
If your spouse has wronged you in some way or you do not want a divorce, it may be tempting to make the process as difficult as possible for them out of spite. However, if you demand too much in your divorce because you are angry, you will hurt yourself in the process.
When you refuse to reach a reasonable settlement because you wish to upset your spouse, you will end up paying more in legal fees and are unlikely to end up with more of the assets. Maryland is an equitable distribution state, and your emotions will not change how the property is divided.
Ignoring the Tax Consequences During Division of Property
The value of assets may be a primary consideration during the division of property, but it is also important to recognize the tax consequences associated with each asset. Some will have tax burdens attached to them, while others may provide tax breaks.
Similarly, keep in mind that although many assets can be transferred between spouses in a divorce without any tax repercussions, failing to follow the proper procedures in these transfers can cause significant tax consequences. Therefore, it is essential to have proper legal guidance from attorneys who are well-versed on the tax consequences of dividing assets such as retirement plans.
Failing to Use the Services of Valuation Experts
The fair division of marital assets depends on a comprehensive understanding of their value. While the value of a car or home can be determined in a relatively straightforward manner, some assets in high-asset divorces are far more challenging to determine.
For example, it can be very difficult to calculate the true value of a professional practice or business owned by one spouse. These types of assets require a professional valuation and although this will involve a fee, it is a worthwhile investment. Often, a business valuation by one spouse may find that a business is actually worth considerably more than the other spouse claims. Both spouses should enlist their own experts.
Schedule a Consultation with the Maryland Divorce Attorneys at SIEGELLAW
If you are planning to dissolve a high-asset marriage, work with family law attorneys who understand the complex transactions involved in these cases. For help ensuring your assets are protected in a high-asset divorce, schedule a consultation with the experienced Maryland divorce attorneys at SIEGELLAW today.