Common mistakes that are made in a high asset divorce
One mistake in a high asset divorce is that there may be assets that get overlooked. It is critical that all assets and liabilities are known. Important documents should be located including tax records, bank statements, investment statements, retirement and pension accounts, credit card bills, household bills and insurance. These all need to be accounted for. There should also be an inventory done on all property including valuable artwork, collections, cars and real estate. A valuation expert may be needed for business value, stock options or a professional partnership.
It can also be a mistake to keep the house. Although the family house has great sentimental value, it can be costly in the long term. One person trying to pay for the mortgage, taxes and the maintenance can be too expensive.
It is also important to make sure expenses after the divorce are calculated correctly. If a person underestimates what the expenses will be, they risk not having enough money. It is important to know how much food, clothing and housing will be. Health insurance can also be another big expense. It is important to make sure these expenses can be met without the help of an ex-spouse because there could be something that happens that affects a payment.
Once the divorce is finalized, make sure important documents are updated as well. Beneficiaries on retirement and investment accounts should be updated. Also update estate planning documents including wills and health care proxies. All the titles on real estate and cars should be updated too.
Source: wsj.com, “Divorce and money: Six costly mistakes“, Veronica Dagher, May 15, 2015