5 Pitfalls of a High-Net-Worth Divorce

Cherokee County Divorce Advice

Having financial resources is a blessing and privilege in so many ways, but when you’re getting divorced, it’s often easier if you don’t have a lot to divide up.

Money is often a point of contention with couples, but even more so when there’s a lot of it and many divorcing couples who fall into this category fight about finances for years before they decide to get divorced.

The reality is that high-net-worth divorces are more complicated, more acrimonious, and more expensive than those between couples who don’t have deep financial resources.

Here are some reasons why, and a few important pitfalls to avoid.

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Major Power Imbalances

Sometimes the divorcing spouses have more or less equal incomes and assets. But frequently in high-net-worth divorces, the financial picture is imbalanced, and one spouse may have been out of the workforce for a long time.

This results in a large power imbalance between spouses that can make these divorces especially unpleasant. Divorce doesn’t exactly bring out the best in everyone, but when these unequal dynamics are at play, abusive and controlling behavior isn’t uncommon.

Complex, Entangled Assets

High-net-worth spouses have a lot of expensive assets to divide between them and that can be challenging. Homes, vehicles, bank accounts, retirement accounts, and more need to be carefully parsed to determine who is entitled to what.

And because large amounts of money are involved, feelings surrounding these assets are often intense. Each spouse may have a very different perspective on what kind of division is fair.

While these issues can be sorted out in mediation, there’s a heightened chance that the two parties won’t agree and will wind up in court or need a mediation process better designed for more complex divisions of assets, such as collaborative divorce.

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Dishonesty Surrounding Money

When a lot of money is involved, it’s surprisingly common that one spouse – often the lower-earning spouse – doesn’t know exactly how much money the higher-earning spouse makes, or where all their assets are.

Money brings up all kinds of strong feelings in people.

For many different reasons, the higher-earning spouse might hide their income and assets, lie to their spouse, or generally obscure exactly how much they make.

And that can make divorce difficult because when you’re getting divorced, you need a full picture of your finances. You’ll also need all the supporting documentation for various claims you’re making, and those documents have a tendency to disappear if one spouse has a history of being dishonest about finances.

In addition, alimony and child support payments are often determined based on the payer’s income. It’s not unusual for the higher-earning spouse to hide or obscure assets and finances to prevent them from being taken into account when those payments are determined.

Sometimes, the only way to get around this is to hire a forensic accountant to investigate the spouse’s holdings, which takes additional time and costs additional money.

Alimony and Child Support Become Contentious

When there’s a large income disparity between spouses, and especially if one spouse has been out of work for a long period to raise children or support the earning spouse at home, the lower-earning spouse doesn’t just lose a partner in the divorce. They lose their income.

When that happens, alimony and child support payments become massively important. For the lower-earning spouse, it’s their livelihood.

But if the wealthier spouse feels the amount isn’t fair, this can become a contentious issue that often leads to a court trial.

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A More Expensive Process

According to Martindale.com, the average cost of divorce in Georgia is $14,700. But other factors can raise the cost considerably.

Divorces involving alimony and child support, custody issues, and complex financial entanglements average approximately $20,000-$22,000.

Of course, this is only an average estimate – there are a lot of individual factors that determine how much your divorce will cost.

But the longer a divorce takes, the more complex the issues are, and the more experts need to be hired—child custody experts, appraisers, financial analysts, and more – the more expensive it will be.

Another factor that makes the process more expensive is that, when large amounts of money are in play, each spouse stands to win more money by fighting it out than it costs to draw out the divorce process – and they can afford to sustain that fight for longer.

Talk to An Experienced Cherokee County Family Lawyer About Your Divorce

If you’re facing the prospect of a difficult divorce, we can help.

We’ve helped countless people navigate the complexities of high-net-worth divorce. Call us at (770) 479-1500 for a confidential consultation today.