Pennsylvania: Common Mistakes In High Asset Divorces

Divorce is difficult, financially and emotionally. This is a given. Even in the most amiable of separations, the discussion of assets and debts can easily become clouded by feelings of guilt, anger, embarrassment, defensiveness, even vindictiveness.

In marriages with high assets, emotions can be heightened. Typically, one of the spouses is more financially savvy than the other, or one is more attuned to future financial consequences.

This is where a lawyer is necessary. Not only do I act as a third, uninterested party, but you hire me to represent you, and only you. My sole job, ethically and legally, is to represent your interests. That said, here are some common pitfalls I’ve encountered when representing clients with average or high assets.

1. Don’t hide assets and debts. The process of uncovering a total list of marital assets and debts, called Discovery, is a legal right for both sides. If you hide money, real estate, pensions or investments, you will be found out. Then, you will have lost the most important asset of all: your credibility in court.
2. Don’t equate money with revenge. While it is difficult to separate the two, your right to marital property is unrelated to the emotions you feel toward each other. Pennsylvania is an equitable distribution state; hard as it may seem, the law requires an equitable property split between the two of you – regardless if one feels they are “owed” more emotionally.
3. Never agree to anything “just to get the divorce over with.” This should be obvious, but the complex web of emotions involved in separation can lead to unlikely arrangements that just aren’t fair to you.
4. Hire a lawyer who is a strategist, not a bully. I can’t tell you how many times in my 23 years of practicing law that I have encountered opposing attorneys who seem to think that attitude, volume and the drama of showing outrage will sway a judge. I can tell you it isn’t so. Our county judges (recall that in Pennsylvania, divorce jurisdiction is with your county Court of Common Pleas) are tasked with enforcing and applying the law as laid out in Pennsylvania’s Divorce Code. While they have some leeway for discretionary choices, it is towards the most fair settlement possible – not punitive steps against one party or the other. Judges are lawyers, too. They will most appreciate a legal argument that is researched, well laid out and presented in a timely fashion.
5. Take the gathering of financial documents seriously. Most spouses have trouble believing the amount of detail necessary to legally and defensibly prepare for equitable distribution of assets and debts. Take the inventory of your assets and debts seriously. Some people think vague references to accounts, or generalized spreadsheets are enough. Most people put off the uncomfortable, time-consuming and, to some, irritating task of finding or printing out needed statements and other financial records. Decide upfront that you will devote the time needed to listing and revealing your assets and debts to your lawyer and provide credible, clean, usable copies of proof of the same.
6. Your friend’s divorce is not your divorce. The majority of spouses are going through divorce for the first time. You might lean heavily on the support and advice of friends who have been there ahead of you. My caution is that your friends, close as they are, likely are not revealing to you every detail of their own most private affairs. You can’t compare your situation to theirs. You canapply the same state divorce law to your situation. How it plays out in your particular divorce depends on many factors, such as whether there are children, inheritances, businesses owned by one or both spouses, or support or alimony.
7. Don’t forget the tax consequences of your decisions. The new tax law will remove tax deductions for payors of alimony after December 31, 2018. If you are rolling over retirement assets like Roth IRAs, you need to understand the tax rules for such rollovers. A divorce-specialized financial professional is a good idea, as is choosing an attorney who understands the long term ramifications of such divisions of assets.

I offer a free first consult. Call my office at 215-345-5259 to schedule.

– Elissa C. Goldberg, Esquire

Law Office of Elissa C. Goldberg
107 North Broad Street, Suite 211
Doylestown, PA 18901
Phone: 215-345-5259
Fax: 215-345-7458