While the movie “Fools Rush In” centers around a couple falling in love too quickly, the same dangers can apply to a couple who are splitting up. There are many potential pitfalls to consider when you go through the divorce process. Too often, people only recognize these mistakes when the divorce is finalized and it’s too late.
And naturally, in a high-asset divorce, the stakes are even higher. Pay particular attention to these six common mistakes so you can avoid making a bad decision that could haunt you, and your bank account, for years to come.
- Rushing through your divorce
Perhaps the most common phrase uttered by people going through a divorce is, “I just want this to be over.” While understandable, you need to resist the temptation to rush the process, because this often leads to making costly mistakes. This is especially true when deciding how assets are divided in divorce.
High asset divorces most often take longer, because your attorney needs more time to properly examine and investigate all of the assets to make sure nothing is overlooked. Rush through this process and you run the risk of losing something valuable.
And remember, once a divorce is finalized, you cannot redistribute the property. In other words, you’re simply out of luck.
- Letting your emotions decide
Regardless of what feelings you may have for your spouse, letting your emotions influence your decisions when dividing marital propertyis never advisable. This is where you should rely on your divorce attorney to negotiate the settlment.
Often times, there is a very real desire to fight for certain assets out of spite. Don’t fall into this trap. The one thing you should be focused on is, “How can I best set myself up for the future?” Treat your divorce like a business dissolution, not a fight, and you’ll end up in much better shape.
- Hiding Assets
In some cases, the higher-earning spouse or the spouse with more information about the couples’ finances, may be tempted to hide certain assets or fail to disclose all accounts. Never do this, as the consequences of being caught will almost certainly far outweigh any advantage you might be hoping to gain.
In Tarrant County, both parties must disclose all assets in an Inventory and Appraisement document, the accuracy of which they swear to under oath.
It is very likely that any undisclosed assets will be discovered by your spouse’s attorney, and your attempt to conceal them will severely damage your credibility with the judge.
If your failure to disclose is uncovered after the divorce is finalized, this could lead to more costly litigation, and you may be subject to sanctions or be forced to pay your ex-spouse’s legal fees.
- Ignoring tax consequences
Marriage comes with certain definite tax benefits. When you’re going through the process of divorce property division, you need to consider how this might change and how it will affect your finances.
Issues like who retains the marital home, the structure of your alimony payments, child dependency, and the division of non-liquid assets like retirement accounts and pensions can all have a significant affect on your taxes moving forward.
This makes it very important that you consult a tax professional regarding the specific tax consequences of any settlement agreement.
Additionally, if your divorce goes to court, you need to be ready to present evidence of the tax ramifications of a property division, as this is one of the criteria that your judge will consider when ruling on your case.
- Acting in anger
It should go without saying that acting in anger rarely turns out well, but it bears repeating. Making a rash decision like selling property without consulting an attorney or consulting your spouse can have major negative consequences.
One of the benefits of having an attorney is the objective, level-headed advice they can provide when you need it the most.
Which leads us into the last mistake…
- Not hiring an attorney
Especially in a high-asset divorce, you will almost certainly not be able to adequately protect your future without the help of a competent divorce attorney. It is very common for people entering divorce proceedings to overlook important details or be unaware of their rights and of the full scope of what they’re entitled to.
Also, don’t make the mistake of taking your spouse’s word regarding what you’re entitled to. Remember, you’re getting divorced for a reason. We’re guessing it’s not because your spouse is too trustworthy.
Deciding who gets what in a divorcecan be a difficult, messy process if you don’t have the right guidance. You need someone on your side who has been there before, and who can give you the knowledge and advice you need to make the right decisions for your future.
If you’re entering into divorce proceedings, contact Hoppes & Cutrer today to speak with your local Tarrant County divorce law experts. We’ll make sure that your rights and interests are well protected.