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High-Asset Divorce Mistakes You Can't Afford to Make

Any divorce is difficult, but high-asset divorces can be particularly challenging. When both parties stand to lose significant assets or possessions, the divorce process can quickly become contentious.

The more prepared you are going into your high-asset divorce, the easier it will be to pursue a favorable outcome. Today, we're covering common mistakes in high-asset divorces that you can't afford to make.

Hiding Assets

In a divorce, both parties have to provide the court with an exhaustive inventory of all personal and community assets and liabilities during the property division process.

The court has a simple objective: Try and ensure that each divorcee maintains the same quality of life post-divorce that they enjoyed while married. Frequently, the division of assets and liabilities plays a central role in enabling courts to achieve that goal.

North Carolina is an equitable distribution state, meaning that courts divide assets and liabilities in a "fair" manner to each spouse. As a result, the higher-earning spouse (if there is one) often takes a significant financial hit during property division, since the court determines it will be easier for them to get back on their feet without any assistance post-divorce.

Many high-asset divorces involve one high-net-worth party acting as the primary breadwinner. To receive a more favorable judgment in the property division process, high-net-worth individuals may be tempted to try and hide assets from the court.

Hiding assets from the court rarely works out. Attempting to hide assets and getting caught will result in much harsher legal penalties and worse financial ramifications than simply abiding by the rules of property division.

Failing to Consider Taxes

Taxes are one of the most overlooked parts of the divorce process. Your divorce can completely change how you're taxed, affecting you financially.

Married couples receive certain tax incentives. If both parties in a high-asset divorce are high-net-worth individuals, the divorce could change your tax bracket and make it more difficult to pay taxes. The same is also true of marriages where one party acts as the primary breadwinner. Consult your lawyer and an accountant to see how your taxes will change post-divorce.

Additionally, taxes on assets can also play a role in the divorce. If you keep a house you used to own with your partner, will you be able to afford the estate tax on your own? If you sell it, will it be susceptible to a capital gains tax? These are the kind of questions you need to answer moving forward with your divorce.

Not Accounting for Child Support Costs (if Children Are Involved)

In high-asset divorces where one parent has certain expectations for their child or acts as the primary breadwinner, child support costs can easily exceed expectations.

Courts use child support to ensure the child can pursue their best interests and retain the same quality of life post-divorce that they enjoyed while their parents were married.

If you're the primary breadwinner, you can expect a significant child support judgment from the court to achieve that goal.

Furthermore, many children in high-asset divorces receive unique services or opportunities, such as tutoring, extracurricular activities, etc. If you pay for these activities for your child during marriage, expect to continue doing so post-divorce.

At Krusch Divorce Resolution, we can help you pursue the justice you deserve in a high-asset divorce.

To learn more or schedule a consultation with an experienced high-asset divorce attorney, contact us online or via phone at (704) 343-8811.

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