Keep Costs to a Minimum in a High Asset Divorce

On behalf of Johnson, Sclafani & Moriarty, Attorneys at Law posted in High Asset Divorce on Thursday, July 30, 2015.

While divorce usually will cause all parties to take a hit to their wallets, when wealthy couples divorce, a prolonged court battle can be particularly costly.

In cases where there is a great disparity between the independently owned assets of both parties, money can be used as a weapon. The co-founder of a wealth advisory firm with offices in several states noted that often money comes to represent a completely different issue over which the divorcing couple may be at odds.

“The real issues are . . . the children and lack of trust. Money ends up being the tool,” she disclosed. The spouse with fewer assets and a lower net worth may feel that he or she can extract financial vengeance from their more well-heeled spouse.

But this escalation tactic often means an even more protracted case that churns through bank accounts in order to pay legal bills. Rather than nickle-and-diming one’s former spouse and parsing through nitpicky settlement offers, it may be a wiser choice to try mediation.

Professionally trained mediators can de-escalate conflicts and defuse powder-keg scenarios that only further estrange the parties. Particularly when there are children from the union, divorcing couples must learn to communicate effectively and without rancor.

Children can become confused if they are moving between lifestyles of opulence and near-poverty. It can cause them to resent one parent or even refuse to honor the visitation agreement.

Most affluent couples head this problem off at the pass by drawing up prenuptial agreements well before the wedding. The less wealthy partner should address any asset valuation concerns with an unbiased attorney who is unaffiliated with their future spouse.

Source: bankrate.com, “High cost of a rich divorce,” Judy Martel, accessed July 30, 2015