Many high-asset couples are each, individually, sophisticated financial parties who are concerned about the assets their hard work and education has permitted them to accumulate. In other high asset relationships and marriages, one party may be the main breadwinner but both parties are likely financially sophisticated. However, despite education, business, savvy, and an array of advantages individuals who face high asset divorces often make simple, preventable errors that are likely to damage their chances of achieving a favorable result. In some instances, mistakes can have even more far-reaching consequences and may even trigger a criminal investigation.
The Philadelphia high asset divorce attorneys of Sadek & Cooper can handle high asset divorces strategically and methodically. We can help you avoid common errors in complex divorces. To schedule a confidential consultation, call our law firm at 215-814-0395 today. We have offices conveniently located in Center City Philadelphia, northeast Philadelphia, Delaware County, Bucks County, and Moorestown, New Jersey.
Divorce Mistake #1: “I Just Need to Get Out of this Marriage and Then I Can Figure Everything Out.”
At Sadek & Cooper, we understand that a divorce is a life-altering experience that can have a profound emotional impact on any individual. In some instance, the individual may seem to take the approach to the proceedings that if they can just get through this divorce, then they will worry about the consequences and details after the divorce is final. Whether this approach is motivated by an allegedly abusive spouse or guilt over the divorce, saying that your soon-to-be-ex-spouse can have “anything they want” just so you can get away from them can have devastating effects on one’s finances, business, and all aspects of one’s life. Simply wanting to get the divorce over with can cause an individual to make poor decisions regarding Pennsylvania alimony and spousal support, child support, and many other important aspects of a divorce.
Divorce Mistake #2: “Divorce Tax Considerations Can Wait Until Tax Time.”
Frequently individuals may attempt to move forward with an equitable division of marital assets without considering all potential impacts. Frequently the tax impacts of a certain distribution plan are not fully considered and the individual ends up facing an unexpectedly large tax bill in April or when an event triggers a recognition of gain. For instance, consider a divorcing spouse who elects to receive and equitable division of property that includes items with significant built-in gain. Due to the initial non-recognition of gain from a transfer incident to divorce provided under IRS §1041(a), the spouse may believe that he or she secured a good deal. However, when the property is sold or otherwise liquidated, the built-in gain will be recognized and tax will come due on this money. A failure to account for divorce tax considerations can lead to a settlement that provides less than meets the eye. Including divorce tax planning in a high asset divorce can minimize the risk of a tax surprise.
Divorce Mistake #3: “My Ex-Spouse Won’t Miss this Property and It Belongs to Me Anyway.”
This mistake is probably the one that can lead to the most serious consequences for the party responsible for concealing assets. To start, an individual who is believed or known to be hiding assets is unlikely to receive any benefit of the doubt from the court. If the court does detect transfers to friends and family members in the weeks or months leading up to the divorce, it is highly likely that a court will set them aside as fraudulent transfers. Once the court doubts your credibility, it is nearly impossible to regain that lost trust. However, events can spiral even further out of control
Consider the case of Alaska surgeon Michael Brandner. In 2008, upon learning of his wife’s intent to divorce, Dr. Bradner set off on a road trip from Washington to Central America where he deposited $350,000 in cash and 1,000 ounces of gold at a Costa Rican bank. He then traveled to Panama where he set up and opened an account under a sham corporation. He later transferred $4.8 million to this secret account. Dr. Bradner proceeded through the divorce apparently making false statements to conceal the existence of these assets.
In 2011, Dr. Bradner attempted to repatriate these funds. The funds were seized by agents from the Department of Homeland Security. Dr. Bradner was charged with multiple counts of fraud and tax evasion. He was convicted on four counts of wire fraud and three counts of tax evasion. For his concealment of assets during the divorce and other subsequent actions, Bradner could have faced up to 95 years in federal prison.
Work with Philadelphia Divorce Lawyers in High Asset Divorces
If you are facing a high asset divorce in Pennsylvania or New Jersey, the lawyers of Sadek & Cooper may be able to fight for you. To schedule a private, confidential legal consultation with our divorce law team, call 215-814-0395 today