Mistakes to avoid in a high net worth divorce
Murfreesboro high asset divorce attorneys help you avoid costly money mistakes
High net worth divorces present a unique set of challenges. Not only are there greater amounts of assets to divide and support to determine, but these assets are also often much more complicated in nature. In addition to savings and checking accounts, there may be valuable retirement accounts, investment accounts and other forms of valuable assets to be divided.
As you work through your divorce, it is important to avoid financial mistakes that can lead to an inequitable divorce and leave you unhappy with the outcome. Our team at Kidwell, South, Beasley and Haley has been working with clients for more than 40 years to ensure that our clients are satisfied with their divorce outcome.
Common financial mistakes made during a high asset divorce
Many high net worth divorcees will often make mistakes in not identifying the financial intricacies of certain types of assets. For instance, these three common mistakes can lead to costly issues for one or both parties:
- Disregarding potential taxes: It may seem obvious, but it can be easy to lose sight of the fact that money that goes to the IRS does not go to either spouse. By valuating investments at an after-tax rate and working to minimize the tax impact of your settlement you can each save money.
- Failure to account for passive appreciation in a retirement account: Money accumulated in a 401k or IRA during the marriage is considered a marital asset. When separating this value from the value of the account before the marriage it is important to account for passive appreciation, which is the appreciation based on market factors. This is by contrast to active appreciation, which is comprised of the direct contributions. This difference can be potentially massive.
- Ignoring cost of living adjustments in a pension: Pensions earned during the marriage are marital property, and are often important assets to be divided. Many pensions will include cost of living adjustments on a yearly basis, which a spouse may not receive in a divorce settlement if such adjustments are not explicitly included.
- Lack of consideration for social security benefits: In marriages that last 10 or more years, the lower-earning spouse may be eligible for benefits on the higher-earning spouse’s record without lowering the benefits paid to the higher earner.
- Not accounting for inflation: Inflation costs can greatly affect the long-term value of a settlement. Not accounting for inflation when determining support payments can lead to financial issues at a later date, especially when considering large expenses like a mortgage or college tuition.
Working with an experienced lawyer like our attorneys at Kidwell, South, Beasley and Haley can help ensure that you avoid these and other mistakes when planning your high net worth divorce. Our more than 40 years of experience in Tennessee will help us work to ensure your divorce covers your financial bases.
Contact a Murfreesboro high net worth divorce attorney for sound legal guidance
A high net worth divorce requires an experienced, talented legal team that will ensure each detail is covered. Contact our team at Kidwell, South, Beasley and Haley for more information at 615-893-1331.