When a couple with seemingly significant wealth chooses to end their marriage, post-divorce financial concerns may not be as great as they are for couples in Massachusetts who are considered middle or upper-middle class. The simple truth of the matter is, even high net worth divorce cases are not without their money surprises. Without careful planning, money can quickly disappear. What are some of the biggest divorce-related money surprises that can affect all couples?
Problem number one: taxes. Taxes can take a big chunk of one’s post-divorce assets. If property is sold, or retirement and other financial accounts are not split correctly, one may owe a lot in taxes.
Problem number two: child support. The state of Massachusetts does use a basic calculation to determine how much one may have to pay in child support. However, standard of living is also taken into account in high net worth divorce cases. Extras may need to be provided for, and funds for higher education need to be put aside — among other things. Simply put, one may find child support to be a bigger expense than expected.
Problem number three: housing costs. Housing costs can seem astronomical, particularly when there is only one income being put toward it. Mortgage, utilities, design fees, furniture expenses, taxes; these costs can add up quickly and can eat into one’s savings pretty fast if one is not careful.
When going through a high net worth divorce, looking ahead is necessary when trying to negotiate the division of assets. No one wants to feel that they are getting the short end of the stick. No one wants to feel they are left struggling too much financially when all is said and done. Yes, divorce will change one’s financial position, but with the right settlement terms — which can be achieved with the assistance of legal counsel — and careful planning, any money surprises that do arise will not necessarily break the bank.