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Wealth doesn't mean you have all the answers in event of divorce

There is a difference between entering a marriage with significant assets and wealth accumulated during the marriage.

In the former situation, the chances are good that the parties taking vows will have a prenuptial agreement in place beforehand. In the latter situation, the process of accumulating wealth may happen in such a way that the thought of distributing it in the event of a divorce never even comes to mind.

A postnuptial agreement might be one way to address property division in the second scenario, but too often the subject never comes up. This can lead to circumstances in divorce that can be emotionally draining and financially troublesome for all involved. Consulting an attorney can help avoid the issues.

One of the interesting things about wealth is that it doesn't mean the holders of it have the answers to all life's questions. Russ Alan Prince, a financial advisor to the ultra wealthy, observed recently that it is not uncommon for the wealthy to find themselves without a documented plan for dividing assets and debts when they decide to divorce. He says three things stand out as common damaging errors.

The first is that they think that the outcome they want is the one they will get if they go to divorce court. Experts in divorce financial analysis say it isn't necessarily so. They observe that not only might you not get what you want, but your whole situation could wind up in the news. The suggestion is that other options such as divorce mediation may be more suitable for ensuring a private resolution of issues.

Next on the Prince list is listening to advice from family or friends. Anyone going through a divorce is naturally inclined to turn to those close to them for emotional support. Those folks, with all good intention, may also offer advice. But no two cases are alike and one person's circumstances won't be the same as yours, which only supports the wisdom of getting help from the most experienced people in the field.

Finally Prince stresses the importance of getting a full accounting of assets. It can be easy for those with a lot of wealth to speak in terms of net values or round figures. But if you don't get a complete accounting, something can easily be overlooked and that can have huge economic implications.

Source: Forbes, "Three Of The Biggest Mistakes The Wealthy Make When Divorcing, Russ Alan Prince, June 9, 2014

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