Ramifications of Divorcing Out of a High Net Worth Family
The Challenges of Divorcing Out of a High Net Worth Family
“For I don’t care too much for money, for money can’t buy me love.”
The Beatles were right when they sang Can’t Buy Me Love. Money can’t buy you love. But it can buy you a lot of other things. If you’re facing a divorce that will remove you from a high net worth family, facing a new, lower standard of living can be a big adjustment.
In this series on high net worth divorce, we’re sharing the wisdom of Michelle Smith, owner of Smith FSG in New York City. Smith frequently works with high net worth couples, offering investment and financial advice. She is also a Certified Divorce Financial Analyst, offering guidance to focus on the long-term effects of divorce, including alimony, calculating divorce payments, asset division, and the future value of retirement and pension funds. Smith is one of the most sought-after divorce financial specialists in the country.
Today, we’re discussing the challenges of divorcing out of a high net worth family, particularly where one spouse will be facing a much lower standard of living. This can be a big adjustment, particularly if a spouse gave up a professional career to raise a family or support their partner in business. It can be frustrating if you feel that your contribution to the marriage, although not financial, involved the lion’s share of responsibility for the home and family.
Don’t Let Emotion Rule the Process
Like other marriages, high net worth couples don’t divorce without reason. When one spouse feels guilt or shame or fury, emotions run high and it can be difficult to look at financial issues in a detached manner. But it’s important for everyone to set emotion aside as much as possible to keep the divorce process efficient and as peaceful as possible, regardless of the amount of money involved.
Accept the Emotions of Divorcing a Family
One of you is leaving a family and it’s important to accept the emotions involved with that and move forward. If you’re divorcing out of a high net worth family, you can definitely feel a sense of loss, as if you’ve lost a part of your tribe. You may also feel a sense of betrayal if the family is working to protect the family trust or inherited wealth. As Ms. Smith shares:
“[Y]es, you might have been part of this family for 15, 20 years and they might be on your side emotionally with how you were wronged if you were wronged. But when it comes down to maybe eight to 10 people behind this money, not just this couple, the family prevails.”
Figure Out How to Communicate
Despite your divorce, you still need to learn to effectively communicate with your spouse during the process. The more heated the two of you become, the longer and more painful the divorce process will be. Learning how to effectively communicate will benefit the two of you in the future, particularly if you have children and will need to interact and co-parent for many years.
Prepare for the Future
The biggest adjustment in divorcing a wealthy family can be the change to your standard of living. Ms. Smith reminds us that often a need-based analysis can help you figure out what your financial needs will be going forward and take some of the stress out of a painful process.
Be sure to check back for the next article in this series with Michelle Smith. We’ll be discussing how you can solve for financial peace with a needs-based analysis. If you’re considering a divorce but you’d like to approach the process in a gentler way, contact my office for a confidential consultation.