Safeguarding Your Assets During Divorce
Divorce is always complicated. One’s relationships and one’s finances are, all at once, placed in jeopardy. It is typical to become overwhelmed. To their detriment, many permit their emotions to guide them through divorce proceedings. Not surprisingly, this has adverse consequences.
Couples with a great deal of wealth must be especially wary of taking inappropriate steps; they stand to lose a great deal of their assets if they succumb to rash, poor decision-making. At the Law Offices of David Bliven, we have assisted individuals in White Plains and the Bronx in their divorce matters for more than 20 years. We offer knowledgeable counsel and work rigorously to protect our clients’ interests — and their assets.
Common Mistakes In High Net Worth Divorce
There are a number of common missteps individuals make during high net worth divorce that could be easily avoided. These include:
- Hiding assets — In their efforts to safeguard their most prized holdings, many individuals try to conceal their assets. They might transfer certain deeds to a trusted third party — a business partner or a child from a former marriage — or place substantial assets in offshore accounts. Yet such activity is routinely uncovered during discovery and ultimately serves to imperil the very holdings one had hoped to protect.
- Permitting a spouse to hide assets — Conversely, many individuals fail to thoroughly investigate their spouse’s financial machinations. To receive your fair due, it is important to hire financial experts who can ensure your spouse’s holdings are properly accounted for.
- Failing to account accurately for assets and liabilities — During divorce in New York, you are required to fill out a financial affidavit that documents your holdings and debts. Though many fail to do so, it is imperative that this affidavit and related forms be filled out properly. Otherwise, you may be responsible for debts you could have avoided or lose assets that should have been yours.
- Letting emotions hold sway — Anger and guilt are the predominant sentiments during divorce, and often color one’s behavior during legal proceedings. If a spouse feels guilty for initiating a divorce, he or she may give up more than is necessary. Likewise, angry parties often take on a ‘fight to the end’ mentality that results only in increasing lawyers’ fees.
I have money in the bank – what do I do?
Be mindful that New York has Automatic Orders which go into place upon the filing of a divorce. Thus, you cannot generally transfer or extinguish funds in a joint account after the filing unless your spouse consents. Money in the bank may be accessed for “usual & customary expenses,” which generally entails household bills. If you’re contemplating a divorce, it may behoove you to consult a Divorce Attorney now regarding what funds you can & cannot transfer.
Generally funds or assets one accrues prior to the marriage are one’s “separate property.” This means your spouse cannot generally claim a right to such funds. However, the initial burden on proving funds or assets are separate is on the holder of those funds or assets. As such, you’re best advised to start gathering the back statements which prove what funds or assets you held on the date of your marriage.
Preparing for a Divorce before it’s filed
If you need money to pay for your attorney, pay large bills, etc., you’re best advised to secure those funds before the divorce is even filed. Once the case is filed, as stated, you may be restrained from accessing certain funds without consent of your spouse. As such, if there’s a house which needs to be sold, go ahead & sell it (with, of course, the consent of your spouse) before the case is even filed. If there is a dispute as to credits owed to 1 party, or debts which need to be paid, then evenly split the undisputed funds & place the remainder in the escrow account of 1 of the attorneys.
If you have a large amount of money in a bank account, or investment account, you can handle it the same way. Split the undisputed money evenly, and any remaining funds you can either leave it in the joint account, or deposit it in 1 of the attorneys’ escrow accounts. I have handled far too many cases in which the parties do not do this, then file their divorce case – only to discover they cannot then access the joint funds to pay for their attorney or pay large bills. Better to act now than pay your attorneys to fight it out!
Make Sure You Don’t Misstep
The Law Offices of David Bliven will guide you through every aspect of the process and help you navigate around the common legal pitfalls. To discuss your case with an attorney, call us at 914-468-0968 or arrange a consultation online.