3 Biggest Financial Mistakes HNW Individuals Make Going Through Divorce
Approximately 43% of married American couples end up filing for divorce. While the emotional toll is well-documented, the financial aftermath of divorce can be equally devastating – especially for those with a lot to lose. Property, investments, businesses… If you’re facing divorce with complex assets, the stakes are higher — and so are the risks.
Without proper financial guidance through the process, your net worth could take a catastrophic hit.
High-net-worth individuals face unique risks in divorce, with complex assets and unexpected losses threatening their financial stability. “Divorce can devastate your financial life if you’re not careful,” says Nancy Hetrick, a Certified Divorce Financial Analyst who specializes in high-net-worth cases. “People get fixated on keeping the house or splitting the 401(k), but they miss the bigger picture – tax hits, stock options, or how their income might tank after the split.”
For the wealthy, divorce isn’t just about splitting assets. It’s about navigating a complex financial “battlefield” that could destroy your wealth in a matter of months.
Some Eye-Opening Statistics
$135,000 – The average cost of divorce for high-net-worth individuals, including legal fees, when financial planning is overlooked (Forbes, 2024)
23% – The drop in household income post-divorce, a stark reality for affluent spouses without tailored financial strategies (Duke University, 2023)
$192,900 – The median net worth of U.S. families in 2022, a figure high-net-worth divorcees often see diminish without proactive restructuring (Federal Reserve, 2022)
“I Didn’t See It Coming…”
Xrayvsn, a medical doctor, shared his brutal divorce experience:
“Financially, it felt like I lost everything I worked so hard for in one fell swoop… I lost my 7-figure 401(k) plus another 6 figures in cash and investments due to my divorce settlement… Ignorance about the process cost me dearly.”
His takeaway? “Divorce is one of the worst destroyers of wealth… I wish I’d known to protect myself with better advice upfront.”
Three Critical Financial Mistakes Affluent Divorcees Make
1. Failing to Identify ALL Marital Assets
Many high-net-worth individuals have complex asset structures. Without proper guidance, valuable assets often go undiscovered or undervalued.
Complex portfolios hide wealth – think business equity or deferred compensation.
“Deferred compensation is one of the most common assets that gets overlooked in a divorce,” notes a report from Cornerstone Planning. “These plans can be worth hundreds of thousands, if not millions, and they’re easy to miss if you don’t know where to look on a pay stub or tax return.”
2. Making Tax-Blind Asset Divisions
“Equal” isn’t always equitable when it comes to dividing assets.
A “fair” split can backfire, hard. “One spouse ended up with an investment account that seemed equal on paper,” says Georgia Colley, a Certified Divorce Financial Analyst, “but when she went to sell, she got hit with a $150,000 capital gains tax bill because of the appreciation – her ex walked away with cash that had no tax strings attached.”
3. Misjudging Lifestyle Sustainability
Many affluent individuals dramatically underestimate what it costs to maintain their lifestyle as a single person.
“High-income individuals often have significant ongoing expenses – think property taxes, maintenance on multiple homes, or private school tuition—that don’t scale down after a divorce,” says Russ Thornton, a Certified Financial Planner. “Without rethinking their financial plan, they can burn through assets faster than they expect.”
The Solution?
Expert Guidance For Your Specific Situation
While many advisors claim to help with divorce, few have the training to handle high-net-worth divorce complexities. This disconnect leaves wealthy individuals particularly vulnerable during what can be the most financially significant event of their lives.
Find an Ideally Matched Financial Advisor
What if there was a way to get matched with a financial advisor who has the experience to service your needs and help you navigate divorce successfully? That’s the Invested Better promise…
Invested Better’s Advisor Match Tool connects you with advisors who can provide tailored solutions for your specific financial situation.
Unlike generic “find an advisor” services, InvestedBetter’s matching system considers:
- Your asset types and complexity
- Your income level and sources
- Your age and retirement timeline
- Your concerns and priorities
“Having a specialist look at your divorce settlement can save you tens or hundreds of thousands of dollars over your lifetime,” says Lisa Decker, a Certified Divorce Financial Analyst. “It’s not just about splitting assets – it’s about setting yourself up for financial stability afterward.”
Take the First Step Toward Financial Peace of Mind
Don’t navigate this financial turning point alone. Try Invested Better’s free Advisor Match Tool to be connected with financial advisors who have the experience to service your needs.
Simply answer a few questions about your situation, your concerns, and your goals… Then you’ll be connected with an advisor who’s ideally suited for you.
Note: Invested Better’s matching service is completely free.
