Property division in high-asset divorces can often be intricate. As couples grapple with evaluating and dividing assets of significant value, disputes may arise over their classification as separate or marital property. Valuing complex assets, such as businesses or intellectual property, adds another layer of difficulty.
Furthermore, emotional attachments to certain items can intensify conflicts and prolong negotiations. Instead of jumping into a high-asset divorce blindly, an individual should understand common mistakes to avoid during the process.
Not keeping good financial records
Information and evidence are powerful resources during any legal proceeding. Therefore, not gathering and organizing financial records promptly when divorce is on the horizon can lead to complications and disputes.
Without clear records, a person has a harder time establishing ownership and asset value. As a result, the court could mandate an inequitable distribution. Waiting to organize finances will likely also prolong the divorce proceedings, increasing stress and costs.
Following the legal and financial advice of friends and family
A person’s loved ones typically want to help during a difficult time. They may have even experienced a divorce themselves. However, they will likely not understand the finer points of Michigan divorce law and how recent legal developments apply to a current situation.
Following misguided advice can jeopardize one’s financial interests or legal rights. Plus, sharing sensitive information with others could escalate conflicts and strain progress during proceedings.
Ignoring tax consequences
Not addressing tax consequences can result in unexpected financial burdens. For example, a person could suffer significant losses in the form of capital gains taxes or other levies, diminishing the overall value of the assets.
Furthermore, overlooking tax consequences could lead to legal issues in the future, such as audits or penalties from the authorities. Properly accounting for tax implications ensures a more equitable distribution of assets and helps both parties avoid potential financial setbacks post-divorce.
Divorce is rarely easy, but it does not have to be unnecessarily difficult. By sidestepping common mistakes, spouses can potentially reduce the pain and frustration of a high-asset divorce.
