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For wealthy individuals, financial repercussions of divorce often costly

Individuals who are going through a divorce are forced to deal with many complicated and highly emotional issues including child custody, child and spousal support and the division of property and assets. Finances are also often a chief concern for anyone going through a divorce.

In most states, including Michigan, income and assets earned and acquired during a marriage are considered to be martial property and therefore subject to equal division between spouses. However, there are often many shades of gray that exist within the laws that dictate what and how certain assets are to be divided during a divorce.

For individuals of considerable wealth, the division of property and assets can be particularly complex. In some cases, an individual may have acquired wealth and assets prior to a marriage and taken steps to protect those assets with a prenuptial agreement. In many cases, however, an individual or couple accumulates wealth and assets throughout the course of a marriage.

While in the midst of a divorce, emotions are often strong and can inhibit an individual’s ability to think clearly and rationally. As a result, some wealthy individuals vow to triumph in a divorce at all costs. This stance often results in a couple battling it out in divorce court where private details quickly become fodder for local conversation and gossip. As an alternative, when possible, warring spouses would be wise to attempt to negotiate and settle matters out of court.

Wealthy individuals are often accustomed to enjoying certain luxuries and a high standard of living. Some individuals, however, fail to fully understand both their current financial picture as well as the potential financial implications of a divorce. As a result, an individual may unwisely agree to certain concessions or a settlement that, at face value, appears to be fair, but really isn't.

Wealthy individuals who are going through the divorce process face many of the same challenges and decisions as individuals of all economic brackets. The difference, however, is that financial matters tend to be more complex and the potential for financial repercussions more costly.

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

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For wealthy individuals, financial repercussions of divorce often costly | Peter A D'Angelo, Attorney at Law, PLC