5 Mistakes to Avoid in a High Net Worth Divorce

A high-net-worth divorce requires careful attention to the details of your case. For our purposes, let’s assume a high-net-worth divorce involves at least $3 million in assets, not including the value of your home. With millions at stake, even minor missteps can have significant financial repercussions. Here are some common mistakes to avoid to protect your financial future.

Mistake #1 – Rushing to Hire a Litigation Attorney

One of the biggest mistakes in a high-net-worth divorce is immediately turning to a litigation attorney with a reputation for being aggressive. While you may think that you will need a “pit bull” lawyer, this often leads to expensive and drawn-out battles. Instead, consider less adversarial dispute resolution methods, such as Mediation or a Collaborative Divorce, which can help you reach a settlement without the financial and emotional toll of fighting it out in court.

Mistake # 2 – Failing to Disclose All Assets

In high-net-worth divorces, there can be the temptation to hide or undervalue certain assets. This could include everything from investment accounts to real estate. Failing to fully disclose your assets will backfire. In New York, where equitable distribution is the law, full transparency is required, and hiding assets can lead to significant penalties and an unfavorable court ruling. Be upfront from the beginning and work with a financial professional to accurately report your holdings.

Mistake # 3 – Assuming You’ll Keep More Because You Earned More

It is easy to feel entitled to a larger share of the marital assets if you are the primary breadwinner. However, New York’s equitable distribution law ensures that you spouse share in the marital wealth, regardless of who earned it. This is because the court views marriage as an economic partnership, where contributions like managing the household or raising children are valued as equally as going to work each day and earning income Accepting this from the start will help you to avoid unnecessary conflict.

Mistake # 4 – Overvaluing Customized Real Estate

Another common mistake is being emotionally attached to highly customized real estate, whether it’s your primary home or a vacation property. I recall a client who turned their 3-bedroom apartment into a 1-bedroom loft. The space was gorgeous, but potential buyers in that neighborhood were looking for family-sized apartments. While our client invested a significant amount into making the space unique, others were not seeing the same value. Other clients made large investments in customizing their weekend homes with certain (and expensive) finishes that suited their style but not the style of the average buyer. Be realistic about the true value of your property and how long it may take to sell.

Mistake # 5 – Ignoring Tax Implications

Not all assets are equal in the eyes of the IRS. Some investments may be heavily taxed, while others may come with minimal tax consequences. Failing to account for these tax differences when dividing assets can cost you dearly. Consult with a tax professional to understand the tax implications before making any final decisions on asset division.

Contact Vacca Family Law Group

At Vacca Family Law Group, we believe that high-net-worth divorces don’t have to turn into high-conflict battles. Our experienced collaborative attorneys and mediators focus on helping couples resolve disputes amicably while protecting their privacy and financial interests. By working with financial neutrals and other professionals, we help you achieve a fair division of assets—without the stress and expense of litigation.

Divorcing with significant assets can feel overwhelming, and you may not believe it can be done without court involvement. We have helped countless high-net-worth couples with complex finances dissolve their marriages amicably and privately, and it always leaves the parties more satisfied with the outcome than those who go to court. Our attorneys are here to guide you through the process with clarity, support, and solutions tailored to your needs. Contact us today at (646) 502-8591 or contact us online to schedule your free introductory call and learn how we can help you protect your financial future.

Vacca Family Law Group is located at One Grand Central Place, 60 E. 42nd St., Suite 700, New York, NY 10165.