How Would You Describe A High Net Worth Divorce Case? What Makes These Types Of Divorces More Complex?
High net worth divorce cases are more complex due to high income and the considerable amount of assets that were acquired either before or during the marriage.
What Makes These Types Of Cases So Complex?
High net worth cases are more complex than those of marriages who are lower middle class due to the categorization of the assets and money within the marriage. Everything in this world is about money. Living on Long Island is extremely expensive. About 70% or more of the people who live in this area and own homes cannot comfortably afford their lives on Long Island. As a result, the divorce rate skyrockets because of the financial pressure of raising a family on Long Island. Money is control, money is power. Control in a relationship starts out on the couple’s first date. After the marriage, it constantly surfaces daily when money is needed to buy something, or when one of the spouses wants to spend money on something that the other spouse deems frivolous or non-essential. That control starts early on in the relationship. After the family comes along, that control will often become more of a conflict, albeit often nonverbal, as both spouses know how much money is available to spend…………but on what? This control and power relationship is quite common, and develops over the years of the marriage, and will likely be the root cause determining whether a couple is fated to be together, raise children, and afford to live in Long Island, or if they are unable to do so. Litigation allows a judge to make these decisions for you. A judge will order the higher earning spouse to pay support to the lower earner. Once a divorce is granted, that control stops, and each spouse spends or doesn’t spend the money available without any ‘control’ by the other. In mediation the couple makes these decisions, guided by an attorney trained and experienced in the mediation process.
What Are The Clear Benefits To Mediation In A High Net Worth Divorce? Why Should This Always Be Considered As A First Option To Proceeding Through The Divorce Process?
Mediation can be beneficial in high net worth divorce cases. First, all divorces can be settled if people are reasonable, and use their common sense. Naturally, the couple will need to be educated, guided and led to a successful settlement agreement. Be sure the mediator you choose is a practicing attorney with proper training and experience in mediating divorces on Long Island. There are only two issues involved in any divorce: children — which is the most important and the reason I have been doing this for the past 35 years — and money. The two are very interrelated. Children cost money, and everything in the life of a couple is about money. The law is black letter as it relates to money regarding the division of assets, (called equitable distribution in New York), and support, (termed either spousal maintenance or child support). There are formulas to help calculate these types of support. Child support is strictly formulaic, and readily available. However, the formula to determine spousal maintenance, (formerly called Alimony), has only have been in existence since 2010.
If you can objectively look at a couple and their marital estate, meaning the assets that were acquired during the marriage, you can apply the formulas and figure it out. The law is clear as to what is or is not considered a marital asset. You should be able to solve that equation with a skilled mediator or lawyer who is familiar with financial and issues about your children. An experienced mediator or lawyer can guide you through the process and help you make your own decisions while never seeing the inside of a courtroom. Furthermore, hiring an attorney for each spouse is not always necessary. Mediation should always be attempted before hiring a lawyer to file papers in court. Of course, if your spouse refuses to give the mediation process a try, you have no choice, but prepare for the aftermath it will cause to your children and bank account………….and your emotional stability.
Having said that, fewer high net worth couples come in or seek mediation because the majority believe that spending more gets them more. The old adage of “you get what you pay for” is very true, except, for the incredible bargain that a couple can get using divorce mediation through my office is incomparable to anything else. You can avoid paying $100,000 to two divorce lawyers to litigate your divorce in court, and likely pay less than $10,000 if you use mediation. However, in the era of Covid-19 (or the next Covid number that causes a pandemic), we are seeing a large uptick of medium to higher net worth marriages, as the benefits far outweigh the devastation litigation often creates.
Why Are An Increasing Number Of High Net Worth Individuals Choosing Mediation?
An increasing number of high net worth individuals are choosing mediation because the days of the matrimonial shark lawyers are over. Many of these lawyers have been sucking the life blood and all money available from their clients, charging for travel to and from court and the incessant waiting in the courthouse. The Supreme Court in Central Islip (where all divorces in Suffolk County are handled), has begun to have all court conferences either via telephone or virtually through Microsoft Teams (similar to skype or zoom). If you do not have to physically go to a court, these shark lawyers can’t charge you for all that wasted time, and your legal bill will be significantly lower, saving lots of money. This reduces the costs of litigation enormously. In my 35 year career, so much waste time was wasted spent getting in the car and travelling to the courthouse, waiting to be called, discussing the case with the judge’s law secretary, coming out into the hallway to talk to the client, going back, and spending several hours to accomplish what can now be done over a virtual or telephone conference with the court in less than a half an hour, with no waiting around, travel time. Since the Court system has converted to virtual conferences, these scheduled conferences have become extremely efficient and are being conducted on time.
The days of abusing the public and taking money from their children’s college funds for all these years, are over. I am glad that I have always maintained the mediation practice for those intelligent couples who understand and appreciate what a complete waste of resources, time, and money it takes to litigate divorces, unless custody is an issue. If custody is an issue, you need the court system. But, there also are methods to solve custody issues through mediation.
What Changes In Lifestyle Might A High Net Worth Divorce Client Expect Once They Are Going Through An Event Through The Divorce Process?
A significant change in lifestyle typically occurs during a divorce. Prior to the divorce, both spouses reside in the same house, and the household bills are a reflection of the entire family. However, when the spouses begin to live in two separate households, life as they knew it changes radically. Living in two separate households is more expensive than maintaining a family in one household. For example, if the combined income of a couple in Suffolk County Long Island is less than $300,000 in which 90% or more of the households are below, getting a divorce is not going to allow either spouse to have the level of lifestyle they enjoyed in Long Island. It is an unfortunate statistic that today, in 2019, the cost of living on Long Island owning a home with a family of four, typically costs between $130,000 and $160,000 of combined gross income per year. While earning that type of income, this couple is not taking a lot of vacations, saving any money, or putting college educational funds away. In many cases, outstanding credit card debt, (indicating fiscal disaster and disorder), has piled up, indicative of living beyond means to do so.
Clearly, in any divorce in which the parties are physically separating into two different households, it is going to put a cramp on the day-to-day living expenses, such as buying food, putting gasoline in the car, paying for utilities, and buying the children an extra pair of sneakers. Unless the income exceeds $250,000, the living expenses become much less manageable. But, households with an income of over $250,000 in Suffolk County constitute less than 12% of households. In 2018, Suffolk County had a population of 1.5 million people with a median age of 42, and a median household income of $100,468 (as published by the NY Board of Vital Statistics).
In What Ways Could My Divorce Impact My Business And Anyone Who Has A Stake In It?
Your divorce can impact your business and anyone who has a stake in it because if any portion of this business was acquired during the marriage, it may be subject to equitable distribution . For instance, if you are a partner in a business, and that business was developed during the marriage, your spouse has a potential right to some of your ownership The New York Courts typically rule that the non-titled spouse (typically a custodial parent who sacrificed a career to raise the children of the marriage), has a right to share in the value of this business as a result of direct or indirect contributions that he or she has made. In most couples that I have divorced, the husband is usually the spouse who has ownership in businesses. Although some women own businesses, it is a rare event on Long Island. Therefore, the following will refer to “the husband” for ease of reference, even though the statute and each case is completely gender-neutral.
If the husband has a partner in a hairbrush manufacturing business in Suffolk County, his partner runs the risk of having all the books of the business opened and scrutinized by a Court appointed forensic accountant, as a result of his divorce. The wife typically seeks the services of a forensic accountant to determine the value of the business, and to determine whether or not there was any unreported cash or perquisites, (such as paying car insurance, cable bills), or other household expenses that are not recognized through general accounting principles as legitimate. Consequently, the divorcing husband’s business partner is not going to be happy about having to open up his books. He likely has a wife and family and doesn’t want his partner’s divorce totally disrupting his business that his wife and his family have nothing to do with. That’s going to put a lot of pressure on him to settle the case and not expose himself, his partner and his business to public scrutiny, (all divorce trials are open to the public…….or were pre Covid), because that is certainly going to affect his business.
Conversely, if the wife is the one who is pressing for this exposure, and she really pushes the envelope and asks the Court to appoint forensic accountant to come in the office of the business and examine all the books and records. However, by doing this, she very well may be killing the goose that lays those golden eggs that she and her family have been dining on all these years……..during the good years. That move should be thought about seriously, which is another reason why going to mediation and settling is a much better idea, if that is available to you. Through the mediation process, our office has often retained a forensic accountant…….the same one the Court would appoint……..but privately, usually for $3,500 without any requirement to have the court system involved, or the privacy of the business displayed to the world. In a litigated case, forensic accountant bills typically run between $25,000 and $50,000. To me, this is a complete waste of money.
Since the court system has no involvement, when you hire the expert privately, there is far less disruption to the business, and the partner and his family are not angry, knowing this will not be made public, and that the expert employed will use tact and grace in obtaining an approximate value to the business being evaluated. The mediation process is completely private. without disrupting people’s lives through the evils that the court system foists upon it through the divorce process.
Are You And Your Spouse Good Candidates For The Mediation Process?
Most couples are good candidates for mediation. If you have strong personalities in your relationship, a very strong mediator is preferable to make sure no one is being steamrolled over during the sessions. If you can’t mediate, hire me as your attorney, and I will fight for all your rights in court, while always on the lookout for a fair settlement. I’ve been doing it for 36 years, but only recently virtually. Because of my experience in settling cases, and that the judges on the Suffolk County bench are all superior jurists, the Covid era and the use of technology, have created what were once very high cost divorces obtainable for $15,000 or $7,500 without children under 21. Of course, I can’t make you any guarantees of bringing in your case for these ‘fixed’ retainer costs, but with the reputation I have developed on Long Island, and social media readily available to confirm my statements on this website, high net worth couples can conclude their divorce for $15,000 or $7,500.
Sound incredible? The methodology here is brand new. It’s the new bizarre world of wearing masks and washing your hands until your skin is about to come off. It’s ‘mediating’ while litigating. The entire world recently caught up to the technology that was already here and waiting to be embraced. While Covid-19 has caused untold tragedy and cost, it has greatly benefited divorcing couples of high net worth. But only if they recognize the truth of this statement and hire me to help them.
Every judge on the Suffolk County Supreme Court bench is learning day to day how to accommodate the volume of divorces, lawyers and litigants while maintaining social distancing and Covid protocols. At the outbreak of Covid in March of 2020, the powers that be thought that it was virtually impossible to retrofit the Courthouse that has been functioning as an in person facility for over 20 years.
The chief judge of New York State has repeatedly stated in all her monthly bulletins issued throughout the pandemic, that the Court system of New York will encourage virtual meetings, conferences and trials, as we embrace the technology and move to the post Covid era.
People often think that there is no control over the process if they go through mediation, especially if one of the parties is a much more powerful force in the dynamic of the relationship. However, there is no divorce I can’t successfully mediate, provided both parties are willing to listen to reason, make informed well thought out decisions and save tens of thousands of dollars.
For more information on Divorce In New York, a complimentary 30-minute zoom consultation is your next best step. Get the information and legal answers you are seeking by emailing Alan at firstname.lastname@example.org, or by calling (631) 462-3100.
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