Going through a divorce can be challenging and stressful, even in the best of circumstances. But it becomes far more complicated when a great deal of wealth is involved. High-net-worth divorces can be drawn out and damaging emotionally and financially.
Just look at recent high-net-worth divorces like Bill and Melinda Gates and Jeff and MacKenzie Bezos divorces to see how significant assets are split. While you may never reach that level of wealth, there are plenty of reasons to protect your assets if you’re a high-net-worth individual.
It might not seem like the most romantic thing to do, but protecting your assets in a relationship is a prudent step to take. We’ve put together five ways you can protect your assets if you and your partner decide to divorce.
Have Separate Bank Accounts
If you and your spouse have a joint bank account, it’s worth considering opening a separate one. Unfortunately, it’s relatively common during or just before divorce for one partner to drain a joint account. If this happens to you, it can leave you with nothing until you complete divorce proceedings.
Having your own bank account means you will have a safety net if anything goes wrong. It’s not a place to funnel money from a joint account in the event of a divorce, but it will ensure you aren’t penniless. It’s a good idea to discuss this with your partner and suggest using your joint account for household expenses and keeping personal accounts for spending.
Review Your Prenup or Create a Postnuptial Agreement
If you and your partner signed a prenuptial agreement, you must have it reviewed by your solicitor regularly. Often, assets in high-net-worth divorces can expand and become more valuable than when you signed. Similarly, your wealth can decline over time, and your prenup needs to reflect that, too. Doing this ensures that your agreement is up to date and assets are shared fairly should your marriage go south.
If you don’t have a prenuptial agreement, you can make one during your marriage. This is known as a postnuptial agreement. Discuss drafting a postnuptial agreement with your partner to formally set out the division of assets if you separate. While it might not seem like a romantic thing to discuss, a postnuptial agreement could strengthen your relationship.
Don’t Attempt to Hide Assets
It can be incredibly tempting to try to hide assets during a divorce — especially if you’re wealthy. People often try to squirrel away large amounts of cash in secret bank accounts or transfer assets to third parties. More often than not, people do this to protect finances before divorce proceedings start.
But while it might seem like a great way to protect your assets, it’s highly unadvisable and can cost you in court. During divorces, and especially high-net-worth divorces, divorce solicitors will do a deep dive into your finances to find hidden assets. If they manage to find anything, the court is unlikely to look at it unfavourably. In fact, the judge will likely interpret it as an attempt to deceive the court and may make financial awards against you.
Hire a Good Solicitor
If you’re a high-net-worth individual, then it’s reasonably likely that you already have a go-to solicitor. But if you’re going through a divorce that involves a great deal of wealth, it’s vital to secure the best divorce lawyers possible.
High-net-worth divorces are often far more complicated than ordinary divorce cases. By hiring an experienced divorce solicitor, you can rest assured that they understand the intricate nature of high-net-worth divorces and will do everything they can to get the best outcome possible.
Divorce proceedings can be tough, and it’s very tempting to rush through them to move on with your life. While it’s tempting to quickly agree to terms on the division of assets, liability and child support payments, you must take your time. Rushing is one of the easiest ways to destroy your finances; let your legal team fight your corner to ensure you get what you deserve.
Be prepared that the proceedings could take months and do what you can to remain calm. Calm heads are always preferable in a divorce and can help to speed up the process. If possible, try to stay on good terms with your ex-partner to make everything much smoother.