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How to Avoid Common Mistakes in High Asset Divorces
After years of building a successful career, managing investments, and establishing a comfortable lifestyle, it can be difficult to adjust to the sudden change of a high asset divorce. The life you have carefully constructed now sits under a legal microscope. Property, savings, and even the family business are up for division, and each decision made could alter your financial future. Given the immense emotional strain, it is easy for a simple oversight to result in costly consequences.
To avoid these errors, it is important to work with a skilled attorney who will ensure every detail is considered when dividing your assets. An Illinois high net worth divorce lawyer can navigate the financial and emotional challenges of the process and address frequently overlooked issues.
Are You Overlooking Assets During Divorce?
A common mistake in high-asset divorce is failing to account for all marital assets. In Illinois, nearly all assets acquired during the marriage are considered marital property, regardless of whose name is on them. If one spouse was not involved in financial management, they may overlook assets like:
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Additional real estate properties
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Investment portfolios such as stocks, bonds, and retirement accounts
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Trusts, inheritances, or gifts that may be partially or fully marital property
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Valuable personal items, such as art collections, antiques, or rare vehicles
Are Emotions Driving Your Decision-Making?
Emotional responses are natural in a divorce, but allowing them to dictate decision-making can lead to expensive errors. For instance, some spouses might hold onto a family home out of nostalgia, only to find that it is too expensive to maintain alone after the divorce. Others may rush through the divorce process to put it behind them, missing opportunities to secure a fair settlement.
To avoid emotional decision-making, consider these steps:
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Take time to assess each financial decision objectively, especially when it involves high value assets.
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Work with a financial planner to understand the long-term costs associated with each choice.
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Consult your attorney on each decision, especially if you find yourself making choices primarily based on sentiment.
Are You Aware of the Tax Consequences?
Taxes are a key consideration in any high asset divorce, and failure to address them can result in unexpected and significant financial consequences. Different assets have different tax implications, and certain types of property transfers could lead to tax liabilities.
A few tax-related pitfalls to watch for include:
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Capital gains taxes on the sale of property, stocks, or other investments
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Retirement accounts, which may be taxable if not handled through a Qualified Domestic Relations Order (QDRO)
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Spousal support payments that may impact tax returns for both parties
Are You Neglecting Financial Planning for the Future?
Another common mistake is not prioritizing financial planning during the divorce. High asset divorces require a thorough look at future financial needs and goals, as people sometimes only focus on dividing assets without considering post-divorce sustainability.
To ensure your financial stability:
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Develop a post-divorce budget that reflects your anticipated lifestyle.
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Consider how assets will appreciate or depreciate over time.
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Review health and life insurance policies to ensure they are updated with new beneficiaries or coverage plans.
Contact a Kane County, IL High Asset Divorce Attorney
Avoiding mistakes in a high asset divorce requires a thoughtful decision-making approach. An experienced St. Charles, IL divorce attorney at Shaw Sanders, P.C. can help you avoid any oversights and protect your financial interests. Call 630-584-5550 to schedule a consultation and start securing a favorable outcome for your future.
630-584-5550