Most people have no idea what you have sacrificed to amass a high net worth. If your estate is worth $10 million or more, chances are you didn’t inherit the money or win the lottery. Instead, you deferred gratification, investing regularly in your savings and investment accounts, while driving an older car, forgoing that night on the town, and working more than 60 hours per week to build a business or practice your profession.
If you are a divorcing person with a high net worth, you will naturally seek to retain as much of your hard-won fortune as you are able, and resist “division” of your estate between you and your spouse.
Conversely, if you stayed at home, raising children and managing a home for your successful husband (or wife), the divorce settlement is about survival. The law says you are entitled to your portion of the marital estate, and to support to maintain “the standard of living established during the marriage” (California Family Code section 4320) while you rebuild your own earning capacity.
In either situation, your natural inclination will be to hire the “Divorce Attorney to the Stars,” that divorce lawyer with the reputation for representing those with high net worth. After all, you can afford the best divorce lawyer. And, isn’t the best justice reserved to those who can afford the best lawyers?
If this is your inclination, I have 1 word for you: STOP! Your divorce case is a real plum for any divorce lawyer, particularly if you have the means to immediately plunk down a $25,000.00 retainer. These attorneys may be honest, hard-working professionals who aggressively seek their client’s best interests. But they also have a built-in conflict of interest. The attorney’s fees are higher if they don’t solve problems, if they draw out conflict, if the case requires numerous court appearances and if it proceeds to trial. But that trial will also destroy your family relationships, polarize you and your spouse, make problem solving impossible and deplete your hard-won estate to the tune of $200,000.00 or more.
Now I have a second word for you: Mediation.
MORE CELEBRITIES CHOOSE MEDIATION
Contrast 2 high-profile divorces: Eva Longoria’s petition to divorce the San Antonio Spurs point guard Tony Parker, and Tiger Woods’s famous divorce.
Longoria hired the famous divorce lawyer to the stars, Beverly Hills attorney Lance Spiegel, to file her petition. While there are few details of this divorce without children, Mr. Spiegel had this to say in an interview with Worth Magazine about why he charges $50,000.00 to prepare a prenuptual agreement:
Ten, 15 years ago, I litigated a prenuptual agreement. the attorney who represented the wife was on the stand for five or six days. the attorney who represented the husband was on the stand for five or six days. and they can’t charge. That story is one I often use to justify why I charge those types of fees.
Imagine the discovery and investigation that preceded that trial, and the immense cost at Mr. Spiegel’s hourly rate, not to mention the court fees. This in a case where the parties tried to protect themselves with a prenup. In Ms. Longoria’s case, hiring an attorney with Mr. Spiegel’s reputation carries with it the risk that Mr. Parker will respond in kind, hiring his own “heavy hitter” with the attendant risks of contentious pre-trial motions, reams of subpoenas, depositions and other discovery, and culminating in a trial that’s essentially a public audit of the couple’s finances. I suspect that the good folks at the National Enquirer are already salivating.
In contrast, we don’t hear much about the Tiger Woods-Elin Nordegren divorce these days, other than speculation regarding the size of the settlement. That’s because the couple settled their differences through private mediation. The couple had this to say to People Magazine:
“We are sad that our marriage is over and we wish each other the very best for the future,” they said in a statement released by Nordegren’s Virginia-based law firm of McGuireWoods. “While we are no longer married, we are the parents of two wonderful children and their happiness has been, and will always be, of paramount importance to both of us.”
ADVANTAGES OF MEDIATION FOR HIGH NET WORTH PEOPLE:
I strongly recommend private mediation to resolve California divorces involving high-net-worth people. Most of the time, attorneys can predict within a certain range how a court would divide an estate, and what resulting parenting plan would be. And, where it is necessary to evaluate assets and insure financial stability and survival, a Certified Divorce Financial Analyst(tm) can be brought in to explore various divisions and support arrangements.
In short, mediation holds the following advantage for a large estate:
- Mediation protects the confidentiality of the estate, avoiding a public audit of the couple’s finances.
- Mediation considers intangibles, such as the couple’s reputation in the community, the couple’s relationship to their children, friends and family.
- Mediation assists the couple in solving mutual problems, instead of pitting them against one another as combatants;
- Mediation models mature problem solving to the children.
- Mediation of a complex estate can typically be accomplished in 2 to 3 mediation sessions, resulting in a cost savings of literally hundreds of thousands of dollars, dollars you worked hard and sacrificed to earn.
- Mediation makes you, the parties, the decision makers.
Mr. Spiegel told Worth that divorce litigation has become more complex than ever. But it doesn’t have to be so difficult. The very wealthy are choosing mediation as the alternative that protects the couple’s reputation (and hence their earning capacity), preserves their hard-won assets, and allows them to cooperate in co-parenting for the benefit of their children.
With the prayer that you and your spouse are able to stay out of court and keep your hard-earned money, I am …
Very truly yours,
Disclaimer: Thomas D. Ferreira is an attorney licensed only in the State of California. The information set forth in this blog or on our websites are not intended to create an attorney-client relationship, nor are the intended as legal advice on your specific matter. This information is not intended to apply to cases or jurisdictions outside the State of California, and those viewing this information outside of California, or having business before jurisdictions outside of California, should consult a local professional or lawyer. The information in this blog is not a substitute for the advice of competent counsel, and is not intended, nor should it be construed, as a guarantee, warrantee or prediction regarding the results of your legal matter.