In any New Jersey divorce, emotions are likely to run high. People unavoidably focus on personal issues such as child custody, child support and visitation. While these are all important, it’s important to remember to keep a close watch on finances. People going through a high net-worth divorce need to take specific steps to be fully protected. If a couple has been fortunate enough to have acquired wealth, divorce will be stressful. If one spouse entered the marriage with vast assets or assets were accrued during the marriage, the other will want to maintain their lifestyle. That will include alimony and property division. The earning spouse will want to retain as much as possible.
Financial planning for a high-asset divorce
People generally expect their divorce to be an arduous dispute – and in some instances, that is an accurate depiction. Still, there might be common ground for the parties to negotiate and reach an agreement without heading to court. Mediation can save time and money while keeping the relationship from falling into acrimony.
Financially, budgeting is critical. While the parties will want to keep their marital lifestyle, it is essential to consider how best to do that and if cost-cutting is available without extensive hardship. This is even more important with children, as health care, education and extracurricular activities inevitably present challenges.
Assets like a family home, retirement accounts, joint credit cards and other properties can be up for debate. Thinking about the financial component of retaining a marital home can give a window into whether it would be preferable to sell it and split the proceeds. Taxes will change because of the divorce, and the implications may be unexpected and costly. Finally, people tend to forget to update their estate plans, life insurance policies and pensions. Failure to do so can leave the wrong person in charge if the unexpected happens.
Professional guidance can assess every factor in a high-asset divorce
Other factors in a high net-worth divorce include whether the split is amicable or contentious; if it was a long-term or short marriage; how much was amassed during the marriage as opposed to before the marriage. Another factor is whether there were understated contributions by the non-earning spouse such as caring for children, supervising the home and freeing the earning spouse to acquire skills and education. Having legal help is crucial, but it is also wise to have financial experts like forensic accountants, business valuation professionals and real estate appraisers. Consulting with those experienced in high-asset divorce might avoid long-term problems as the case moves forward.