High-asset divorces often involve complex financial arrangements and significant property. While emotions may run high, understanding potential pitfalls can help avoid costly mistakes.
Mistakes in property valuation
Accurately valuing marital assets is essential. Real estate, retirement accounts, investments, and business interests may require professional appraisals. Underestimating the value of these assets or failing to identify all marital property can result in unfair settlements. For example, under New Hampshire law, property acquired during the marriage is generally considered marital property and subject to equitable division.
Overlooking tax consequences
Certain assets carry tax implications that could affect their true value. For instance, withdrawing funds from retirement accounts may incur taxes and penalties. Similarly, selling assets to meet division agreements may trigger capital gains taxes. Misjudging these impacts can lead to unexpected financial strain after the divorce.
Ignoring hidden assets
In some cases, one spouse may attempt to hide assets to influence the settlement. Hidden accounts, undisclosed income, or undervalued business interests can alter the outcome. New Hampshire courts expect full financial disclosure. Failing to identify hidden assets can lead to an inequitable division of property.
Accepting unequal debt distribution
Debt division is just as important as asset division. Joint loans, credit card balances, and mortgages remain the responsibility of both parties unless addressed during negotiations. Allowing an unequal distribution of debt without safeguards could leave one party liable for unpaid obligations.
Overreliance on future income
Relying too heavily on future payments can be risky in cases involving spousal support. Financial circumstances can change, making it difficult for a former spouse to meet payment obligations. Balancing support agreements with more secure assets helps provide long-term stability.
Take charge of your financial future
Understanding the financial complexities of a high-asset divorce is critical for protecting your interests. Awareness and preparation can help you avoid common pitfalls and create a more secure post-divorce life.
