High Net worth? Get Divorced Now
April 28, 2009
High Net Worth?
Get Divorced Now
The January 2009 issue of the ABA Journal (American Bar Association www.abajournal.com ) contains an interesting and relevant article for our high net worth readers, written by Eleanor Breitel Alter.
With thanks to Ms. Alter, here is my take on her article.
Ms. Alter, who practices in New York City, cites her own experience of getting a steady stream of high-net-worth divorce clients starting from the time Lehman Brothers failed in September of last year. From a rational viewpoint, this makes sense: divorcing when your net worth is down means that you will have less to divide up with your soon-to-be ex, and it means disencumbering yourself when you have major concerns regarding finances, life style, career, and children.
At the same time, faltering markets, unsure markets, down markets all force your hand. The article cites increased reappraisal of assets and increased scrutiny of values during the divorce proceedings. Where I office, we are finding increased litigation as spouses do battle over who will get the house that’s under water, the summer cabin that can’t be sold, and the retirement and investment funds they both fear will be worth, in round numbers, zero. Now can be a good time to quantify these potential losses, come to grips with them, and move on.
Furthermore, Ms. Alter points out, there are clients with large incomes and expenditures just as large, at best. More than one family has been maintaining a certain life style on a deficit, and the consequences of being wedded to a spendthrift, or of being one, are usually painful. Our experience here in Minnesota bears this out. We are finding that all the above can combine for a more complex, harrowing, and expensive divorce.
Which brings us to another of Ms. Alter’s points — and a hopeful one: these conditions can also be motivation for both sides of the divorce to work together to come up with a rational, fair, and less traumatic, divorce. Often, decrees are negotiated with an eye to renegotiating them again when economic and personal conditions change in the future, reducing the complexity and expense of trying to predict what is inherently unpredictable. It’s up to you.
All of which we hope is food for thought.
Moore Family Law, P.A.
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