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Top 10 Mistakes to Avoid in a High-Net-Worth Divorce

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Top 10 Mistakes to Avoid in a High-Net-Worth Divorce

Divorce is challenging for anyone, but there are special considerations in your divorce because of your high net worth. The advice and information considered standard for divorce cases does not apply to clients in this unique situation. Protect yourself by avoiding these common mistakes.

  1. Hiding Assets. The bulk of your divorce will necessarily be about asset division, so it might seem wise to attempt to move assets around to shield them from the divorce proceedings and your spouse's reach. While it is certainly true that you must do everything you can to protect yourself and your future, divorce requires complete financial disclosure.

    Attempting to obscure or hide assets is something that will most certainly be discovered by the forensic accountant your spouse's legal team is going to hire. Failing to provide complete financial disclosure can result in fines as well as contempt of court and jail time. In addition, it can poison your entire standing before the court and harm all aspects of your case. In short, whatever you think you might save could wind up costing you much more.

  2. Rushing. It's understandable to want to complete your divorce process as quickly and efficiently as possible, particularly if you are ready to move on with your personal life. However, because of the complex issues, stakes, assets, and liabilities involved in a high net worth divorce, the process is, by its very nature, in-depth and protracted. It is never wise to quickly agree to any settlement or to push your legal team to expedite the process, no matter how desperate you are to be free. 

    Preparing a case of this nature requires involved investigation, research, and preparation. The better prepared your team is, the more likely that you will see the results you expect. The court process itself will also be extensive, spanning months if not years before everything is finally wound up. Patience is the best practice for obtaining positive results.

  3. Not using experts. A high net worth divorce includes a vast array of complex issues, and there are experts available for every single category. These include child custody evaluators and advisors; specialized appraisers for art, jewelry, and businesses; tax experts, forensic accountants, speech and acting coaches to assist with testimony; financial advisors; as well as attorneys in other states and countries to assist with holdings in those locations. 

    These professionals provide specialized advice and exceptional knowledge to supplement your legal team's resources. Failing to hire the experts your attorney recommends can result in missed opportunities to improve your case, protect your assets, and maximize your odds in a custody case.

  4. Failing to consider tax consequences. Any distribution of assets in your divorce is going to have significant tax consequences, and it is impossible to evaluate any strategy or recommendation without obtaining an exhaustive prediction as to how it will impact your tax status. It is imperative to weigh tax consequences when considering all asset distribution.

  5. Taking any financial action without consulting your attorney. It's important to be able to manage your assets, particularly in financially volatile times. Still, movements or sales of funds and assets should not take place without first consulting your attorney and ensuring the action will not be viewed as suspicious or determining that it will not harm your case.

  6. Failing to investigate your spouse's finances. Trust is a fantastic thing, but in a high net worth divorce, the rule is trust but verify. You might believe your spouse is completely forthright in their financial disclosures. However, to protect yourself, you must allow your legal team to thoroughly investigate your spouse's holdings to be sure they are completely honest in their disclosure.

  7. Making decisions based on emotion. Every choice made in your divorce must be carefully thought out and approved by your attorney. There will be moments where you are extremely angry or hurt, and it is tempting to take action in those moments, but you must refrain from doing so. Every move that's made in your case must be a coordinated piece of the bigger picture, so that the entire strategy is not disrupted.

  8. Failing to have all assets appraised. All of your important assets should be appraised by an expert in that field so that you have an accurate valuation of your net worth. Never rely on an appraiser hired by your spouse. Your legal team will assist you in obtaining several appraisals for each class of items so that the most advantageous valuation can be applied to your case.

  9. Overspending. While you certainly have every right to spend money during a divorce, excessive spending, particularly on things like vacations and luxury goods, is frowned upon by the court and can be viewed as wasting assets in an attempt to keep them out of your spouse's hands. Strive to present an image of yourself as a prudent, financially cautious person during this time period.

  10. Lying to your lawyer. Your attorney is the one person you must be completely transparent with throughout your divorce case. You must provide an accurate accounting of all assets and debts and share everything about your children that is in any way pertinent to the case.

    Your lawyers can work effectively only if they have all the facts. If there is information you feel is embarrassing to share, simply imagine how embarrassing it would be for that information to be revealed in open court by your spouse's lawyer without your legal team being ready to handle it. It's prudent to practice unconditional candor with your legal team, no matter how uncomfortable it might be. 

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Dror Bikel

Dror Bikel is a Manhattan-based divorce and child custody lawyer. He founded and leads Bikel and Schanfield, New York’s best-known firm for high-conflict matrimonial disputes.

As founding partner of the Manhattan-based firm, Bikel & Schanfield, LLP, Dror Bikel’s 20+ years of trial and litigation experience offers invaluable insight in facilitating settlements, mediating disputes and obtaining superior results for his clients. A recipient of the New York Super Lawyers Award, Mr. Bikel is voted among the Top 5% New York State Family Law Attorneys.

To connect with Dror: 212.682.6222 or [hidden email] or online
To learn more about Dror Bikel: drorbikel.com
To learn more about Dror's book The 1% Divorce: When Titans Clashsuttonhart.com

For media inquiries or speaking engagements: [hidden email]



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