As a Maryland couple prepares for divorce, there are a multitude of things that must be addressed. This is true no matter how wealthy a family may be, but those who are facing a high asset divorce will have even more prep work than couples who have fewer assets to divide. When faced with a high asset divorce, it is absolutely imperative to avoid making any big financial moves in the timeframe leading up to the divorce. Doing so can lead to accusations of depleting martial wealth, which the courts take very seriously.
For example, making business investments or extending personal loans to friends and family can easily be misconstrued as funnelling assets away from the marriage. In fact, sham investments are among the more common ways that spouses try to remove money from the marital pot. If there are any such expenditures that both spouses agree on, the best way to proceed is to outline the investment in writing and have both spouses sign a statement that shows the support of both parties.
A similar issue lies in expenses that are made to set up a new residence for one or both spouses. The best way to handle this need is to agree on a budget and to put that agreement into writing. Otherwise, if one party spends an excessive amount prior to the actual date of separation, he or she may be forced to cede other assets to make up for the money spent on housing needs.
As with so many things in a Maryland high asset divorce, transparency is the best approach. When both sides are aware of the full range of marital assets and how that wealth is being spent as a divorce is underway, things can be made far easier at the negotiating table. Depletion of marital wealth is a double-edged sword; one must be on the lookout for it but must also avoid taking action that might suggest that such an act is taking place.
Source: U.S. News & World Report, “10 Ways to Prevent a Divorce From Ruining Your Finances“, Maryalene LaPonsie, Sept. 29, 2016