Divorce is not known for being an easy or enjoyable process. Along with the emotional stress it tends to create, the complexities, paperwork, and probable heartburn that come with dividing assets can make getting divorced a challenge for all involved. Add in high net worth, and a complicated process has all the makings for a mess if not approached with preparedness and strategy.
While a variety of factors can impact the outcome, the one major element that you are in control of is your level of preparation leading up to the divorce proceedings. Taking time initially on the front end to get organized can make the process less stressful and may even help you achieve more favorable results, which can have long-lasting positive effects on the next phase of your life. Think of it as organizing your closet (and THAT can be satisfying), but with paper instead of shoes!
You’ll find it helpful to develop an organizational system that makes sense to you so that if your lawyer, accountant, or other advisors ask for a document (and they will), you can find it quickly. Grouping similar documents together to reduce the possibility of leaving out a key piece of information is a helpful system to develop. For example, by keeping all home ownership records together such as the deed to your house, purchase documents and mortgage paperwork, your team of advisors can help to make a more accurate estimate of your home’s value than if you simply give them a copy of the deed. This will help ensure that you are approaching this process at an advantage when determining how to divide joint assets. Because the divorce process can often feel so overwhelming, anything you can do to stay organized with paperwork, financial matters, and legal documentation will help you move more smoothly through the process. It will also help you feel more in control of the situation and potentially save you money on legal fees since you are able to provide exactly what your attorney needs when he or she needs it.
Once you’ve located all assets and organized the necessary documentation, it’s usually helpful to classify each asset as separate property or marital/community property; and your attorney can help you navigate the principles surrounding community property state laws, as you may be vested in more than you think given the length of your marriage. While most states generally divide property to achieve fairness, the difference lies in the starting point and the rules each state uses to reach a fair result. In any case, you’ll likely need to know how the property was acquired: whether through a gift, inheritance, purchased prior to marriage or purchased jointly.
It is important to me when working with clients to consider the client’s financial history. Individuals who come from a moneyed background or have been active participants in business or family wealth management during their marriage may have a certain literacy that comes from experience. They may be confident in identifying as a wealthy person in ways that people who receive wealth later on, like in a divorce settlement, do not. I know that the lack of financial literacy does not mean lack of ability to master the subject if provided with the right material. I’ve made it my goal to provide my clients with the right material, and a sense of assuredness that while divorce may change your life, it doesn’t have to change your lifestyle. Let’s connect.