Divorces among the rich differ from middle-class divorces, according to matrimonial law attorney Jacqueline Newman.
"When it comes to money issues in divorce, the laws are drafted to target those with simple financial lives and make it cost efficient so they do not have to spend tons of money on lawyers litigating in court," Newman says. "However, a high-net-worth divorce can present many issues that differ from divorces involving fewer financial assets."
Newman explains:
--It is riskier to litigate high-income cases in court because there is less guidance from the law. Much of the statutory law applies to middle to low income families so when you have high income cases, the judges are given great discretion when they structure awards. This leads to inconsistency and therefore great risks as one judge may greatly differ from another.
--More often than not, high-net-worth cases have more complex assets to value and distribute. This complexity may involve many financial experts valuing assets that have a great degree of subjectivity -- such as business appraisals -- which can lead to a battle of the experts and more litigation.
--Having to pay legal fees can be a great motivator to parties to settle their case. "While I often say that no one can emotionally afford litigation and even if technically one can financially afford it, no one likes to pay attorneys," she says. However, if there are financial means to wage a legal battle vs. a situation where there are not, it can make a huge difference in how the case plays out.
--Child support for high income cases can be difficult to calculate as the amount is often determined by the "needs" of the child instead of a formulaic approach in middle-income cases. "Determining the 'needs' of a 5-year-old becomes a battle amongst parents," she says. "Does Sophie need a matching black pony at Mommy's house as well as Daddy's house?"
--Sometimes high-net-worth cases can actually be easier to settle because if there is enough money that everyone can continue to live their lifestyles together or separate, it makes the split an easier pill to swallow. As it costs more to support two households than one, middle income families can feel the financial strain in a divorce more than wealthier families because their day-to-day lifestyles can change. This makes the settlement more difficult.