Divorce is never easy, and, in my experience, the more assets a divorcing couple has, the more they have to fight over. Though every situation is different, generally speaking, people that don’t have a lot of money tend to come to a divorce agreement more easily. There’s just less to divvy up and dole out.
Wealthy People Have More on the Line
Setting aside the emotional and psychological impacts of divorce (and those can be significant) and looking strictly at financial matters, people with a lot of money have a lot more to figure out when going through the divorce process. When there are more assets, there are more assets to fight about, and this is typically why rich people have longer, more expensive divorces.
That is, unless they were smart enough to sign a fair prenuptial agreement, which I have written about in multiple blog posts and highly recommend to all marrying couples.
However, even if a couple does sign a prenuptial agreement, if there are huge amounts of money on the line and the agreement seems unfair or was not executed properly, it may be contested. This can potentially draw out the divorce. If the prenup is set aside, the parties would have had to litigate that issue and then, on top of that, have to litigate the terms of the divorce. I once worked on a case where the husband had a $75 million trust. He insisted that his wife, who was a 1st grade teacher, sign a prenuptial agreement when they got married. Unfortunately for her, the agreement stipulated that she would receive virtually no money if they were to get divorced. Furthermore, the prenup was drafted by his attorneys, and the wife was given the document the day before the wedding. She didn’t have time to seek independent legal counsel.
Needless to say, the situation was unbalanced from the beginning, which was part of the reason the divorce became so contentious. They fought about the prenup… and just about everything else. This couple had been married for ten years and had two children; and yet, the husband still insisted that she should receive nothing in the divorce.
I argued, “Do you really want your children to see their mother living in poverty while Dad jets around the world in a Cessna and hangs out with movie stars?” Furthermore, I argued that giving my client a sum that could maintain a fair standard of living was not going to negatively impact his lifestyle at all.
The other side fought us on this, but in the end, I eventually won my client enough money that she could live decently. However, the unreasonable position taken by the other side was shocking. I have seen more consideration for the other side’s position in cases where the parties had far less.
Clear Asset Definition
I typically notice that high net worth individuals (and couples) have their assets better defined than those who have less money. And when things are better defined, they are also frequently better protected in the case of a divorce.
This can look like assets being owned by LLCs, or protected in a trust of some kind, or, as in one case I heard about, not even defined as “property” at all but classified as something else entirely. Typically, wealthy people have more access to lawyers and financial managers who understand how to work these kinds of loopholes to their advantage.
Dividing the assets of people who earn $30,000 a year is generally much more straight-forward.
If you are a high net worth individual, or you are married to one and preparing for divorce, don’t let this blog post scare you. Though you may potentially be facing a more challenging divorce process, you are still entitled to a fair proceeding. Call our office today at 303-449-1873 to set up a complimentary consultation.