Top 5 Tips for High Net Worth Divorces
How do you avoid losing your money in a divorce? The stakes are always high when couples have children, homes, family businesses and significant assets. Research shows that these “high asset” divorces take considerably longer than other types to resolve – upwards of two years. They also tend to be more contentious and acrimonious, with spouses who can afford protracted legal battles often engaging in extremely lengthy litigations. Here are five tips to consider:
1) Don’t rush into a settlement
Expect your settlement negotiations to go slowly and expect your spouse’s demands to increase as you get closer to signing a final agreement. There is a tremendous sense of urgency at this stage and emotions may cloud your judgment. You may be tempted to accept an unfavourable settlement just to end the process or settle for less than you know your assets are worth.
But such decisions can haunt you for years, especially if you can’t afford to move out of the family home or live on the reduced terms of your existing settlement. When you’re under pressure, it’s important to take a breath and ask for time to think about any settlement offer that is less than what you are seeking. You may even want to consult another attorney just to get an unbiased second opinion.
2) Be wary of an all-or-nothing stance
Spouses who engage in high asset divorces often demand that their former partners sign away all of their rights to support or benefits. This means that the spouse being asked to give up everything will have to forfeit any claims they might have against the other’s future earnings, for example, if she or he is still obligated to receive spousal support or the other is expected to continue providing health insurance.
Many people conduct their own negotiations and end up with a bad deal because they’re representing themselves. They don’t realize that such an all-or-nothing stance would only come into consideration if their former spouses were in similar financial situations as them – but since most are not, this approach can backfire.
3) Enlist the help of experienced professionals
Ideally, hiring a team of lawyers who understand your situation will be your best defense against making mistakes. You can also hire accountants or financial planners with experience in high asset divorces to ensure that you’re properly evaluating what you need as well as what you deserve.
In addition to your divorce lawyer, it can be useful to have a business lawyer on standby whose only job is to review the documents and make sure that they are fair. This way, if your spouse’s attorney has not been mindful of your interests or tries to slip something into a contract that you know nothing about, you don’t have to worry about renegotiating a bad deal.
4) Seek support from family and friends
High asset divorce cases are more emotionally draining than others. If the effort of going through a separation has already taken its toll on you, it’s possible that your judgment will become clouded at some point during negotiations. Seeking out support from friends and family may help you to stay strong during a time when your emotional state can so easily affect your decisions.
5) Be realistic about whether or not litigation is necessary
A high asset divorce often involves complex financial arrangements that need to be spelled out in detail within the settlement agreement. You might feel that you need legal representation to help you protect your interests, but if the bulk of your assets are in easily divided items that can be managed through a jointly held bank account or other simple arrangement, it’s possible that you may mistakenly think that you could save thousands of dollars by representing yourself. We have seen clients do this only to find that they made a mistake or their do-it-yourself agreement is set aside by the court and they have to start all over again. Save money by retaining an experienced lawyer at the start.
Many high net worth individuals elect to conduct their divorce outside of the courts to remain civil and get their matter confidential from the public eye. Our firm often engages in the Collaborative Process with a full team of lawyers, financial professionals and social workers to make the process quick and efficient.
If you are currently going through a separation or ancillary issues, or are considering such actions, you can contact our office and book a consultation.
