Divorces are complicated. Assets can range from simple bank accounts to complex business holdings. However, high-asset divorces are significantly different. Larger assets and finances become more complex in these kinds of divorces. Even before you start the process of divorce, you need to be aware of common pitfalls. Knowing what to avoid can protect your financial future.
Here are three mistakes to avoid in a high-asset divorce in North Carolina.
#1: Overlooking hidden assets
In high-asset divorces, check all assets carefully. Some spouses try to hide valuable property, investments or income. Common hiding places include:
- Offshore accounts
- Undervalued businesses
- Cryptocurrency wallets
One way you can uncover hidden assets is to work with a forensic accountant. These professionals can help find hidden money. They look at financial records, track cash flow, and identify discrepancies that might indicate concealed wealth.
Remember, full financial disclosure is required in North Carolina divorces for both spouses. Not doing so can result in penalties and an unfavorable division of property for the spouse hiding assets.
#2: Neglecting to put your finances in order
A common mistake in high-asset divorces is failing to organize your finances. Many people underestimate the importance of this step, which can lead to oversights and unfavorable outcomes. To prepare for negotiations and work toward a fair settlement, take the following steps:
- List everything: Create a detailed list of all assets and debts, both marital and separate. This includes real estate, businesses, retirement accounts, etc.
- Gather documents: Collect documents for each asset, like appraisals, valuations and recent account statements.
- Check complex assets: Pay attention to assets like stock options or business shares, as they need professional valuation.
- Know your finances: Understand your current income and expenses. Create a detailed budget that reflects your lifestyle during the marriage and anticipates potential changes post-divorce. This can help during negotiating spousal support or dividing assets.
In North Carolina, equitable distribution laws mean that marital property isn’t always split 50/50. When you don’t have a clear picture of your finances, you put yourself at a disadvantage in high-stakes negotiations.
#3: Letting emotions drive your decisions
Divorce is an emotionally charged process, especially when there are a large amount of assets present. However, allowing emotions to guide your decisions can lead to costly mistakes. In high-asset divorces, the temptation to “win” or punish your spouse can result in a lot of time spent fighting in court. The costs of litigation and other fees can deplete the very assets you’re trying to protect.
Instead, approach your divorce with a clear, strategic plan. Focus on your long-term financial well-being rather than short-term emotional satisfaction.
Take control of your outcome
Handling a high-asset divorce can feel overwhelming due to the complexities involved. However, by taking proactive steps to protect your assets and focusing on a strategic plan, you can secure your financial future and, if applicable, the well-being of your children.