The difficult divorces, Ms. Chemtob said, are less straightforward. “When someone has $12 million but $6 million is in real estate and they have three kids in private school and one spouse isn’t working, that’s a headache,” she said.
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Before the divorce progresses into financial negotiations, advisers say the parties need to step back and consider what kind of divorce they want.
“They need to decide what’s important,” said Katherine Miller, a matrimonial lawyer in New York and New Rochelle who practices collaborative divorce, which is a heightened form of mediation. “Are they going to comport themselves with dignity? Do they want to co-parent their children? Is the concern with preserving your assets?”
The simplest divorces are the ones where money is involved but no children. Ms. Chemtob said she was working on one now where both people work at investment houses and earn plenty of money. It’s just a division of assets.
The degrees of messy divorces, at least when it comes to dividing up money, seem infinite.
Dana Katz is going through a divorce now. She said she helped her husband build his insurance business by making connections for him in their community on Long Island, N.Y. But now, she regrets not asking him to put her name on the business during their 17-year marriage.
While she is receiving money each month for her basic needs, she said it was not enough to preserve the lifestyle she had. “For the time being, my financial situation is precarious,” said Ms. Katz, who has two sons. “Our joint assets are joint and you can’t touch them. And our cash flow came from this business, so I don’t get that.”
For the most part, the idea of lifelong support — what used to be called alimony and is now called maintenance — is a thing of the past. And like many things with divorce, the family courts have instituted formulas to simplify and standardize the process.
The spouse with less typically receives support for a period of time equal to half the length of the marriage. The amount itself will be determined by looking at spending over some period of time and pulling out nonrecurring expenses, like remodeling a kitchen.
Where there is money from trusts, there could be an issue of calculating how much money the spouse benefiting from a trust was spending each year.
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“I tell people to go back and look at all the records,” Ms. Chemtob said. “How much were you spending? How much could you have been spending?”
One thing that cannot be counted on is the continued support of someone’s in-laws in divorce. They could, for instance, decide to stop paying for a grandchild’s private school.
But these discussions assume that there is money to negotiate over. Michelle Smith, a certified divorce financial analyst and the chief executive of Source Financial Advisors, said she had seen situations where a spouse recalls seeing a brokerage statement for $15 million. But it turns out there is $11 million of loans against that account and the house they live in is mortgaged to the hilt.
“It’s this onion that needs to be peeled back slowly,” she said. “I say to these people, ‘I can’t do financial planning for you during your divorce that you never did during your marriage.’”
When it comes to child support, states generally have formulas, too. In New York, for example, one child receives 17 percent of the salary of the parent who doesn’t have custody, two get 25 percent, three 29 percent — though wealthier couples can opt out and negotiate separately.
The trickier part is when it comes to private school. No judge is going to say private school is a requirement for a child, though there can be exceptions, for example, if the children have been in a school most of their lives and are close to finishing.
Even with the standardization of some aspects of divorce, the right strategy matters. Ms. Chemtob said she regularly looks for the most desirable place to file a divorce suit, a process known as forum shopping.
“Whether I have the in-the-money or the out-of-the-money spouse, I’ll decide which county to file in,” she said. “The Hamptons are horrible for the nonmoney spouse, so I’d file in New York City. If you’re seeking distributions of assets or distributions of a business, you want to be in New York City. You don’t want to be in Westchester.”
There are four options in a state like New York for the style of divorce: do-it-yourself, mediation (where the couple is alone with a mediator), collaboration (where a group of neutral parties help the process along) and traditional litigation that may end in court.
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Ms. Smith pointed to situations that may require a lawyer with particular expertise. If, for example, a wife helped her husband build the family business but did not go into office each day, she needs a lawyer who can get her the largest share of that business.
On the other hand, if a husband benefited throughout his marriage from a trust set up by his family, he will want a lawyer who can try to keep that money outside the divorce negotiations, while the wife will want one who can get that money considered.
“It’s a fact pattern,” Ms. Smith said. “You need to find the right strategists. You don’t want to spend $1 million on litigation and you don’t have the right strategy for your fact pattern.”
Ms. Katz said the worst part of her divorce, which has been going on for nine months, is the delays of a month or more between court dates. “You want to get on with your life,” she said. “You want to salvage something from the relationship.”
This type of uncertainty, Ms. Miller said, can make a collaborative divorce a better option for some people. It is like mediation, but instead of the two parties speaking with a mediator, there is a whole support system — like lawyers, financial advisers and child specialists — working toward a settlement.
She said the process works well for complicated assets because the assembled team can take the time to understand and value them. “We’re much more flexible in the collaborative process than the litigation process,” she said.
This process can be expensive, though less than going to court. A collaborative lawyer can cost $30,000 to $40,000 a person, as opposed to more than $100,000 for a divorce lawyer dealing with a similarly complicated case, Ms. Miller said.
Above all, advisers counsel people to remember that the process takes time and that it is unlike any other negotiation.
“Unlike other lawsuits, there is no clear bright line test of winning and losing,” Ms. Smith said. “You can’t handle your divorce like any other contract or movie negotiation. You can’t walk away from the mother or father of your children and say they’re not listening to me and leave the table.”
Correction: September 30, 2016
An earlier version of this article misspelled part of the name of a law firm. It is Chemtob Moss Forman, not Chemtob Moss and Forum.
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Article source: http://www.nytimes.com/2016/10/01/your-money/how-rich-couples-who-arent-pitt-and-jolie-manage-their-divorces.html?partner=rss&emc=rss
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