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High cost of a rich divorce

By Judy Martel · Bankrate.com
Wednesday, June 4, 2014
Posted: 7 am ET

In what may be the most expensive divorce in history, last month Russian fertilizer tycoon Dmitry Rybolovlev was ordered by a Swiss court to pay his former wife Elena $4.5 billion. That's more than half his estimated net worth of $8.8 billion, according to the latest Forbes rich list.

The cost of divorce can escalate dramatically in a long court battle.

The cost of divorce can escalate dramatically in a long court battle.

Wealth is no guarantee of marital success and, in fact, issues around money can extend the painful process of divorce, especially when one spouse is much richer than the other.

Money can be a costly weapon

"One thing I noticed in wealthy divorces is that money is not the real source of the issue," says Susan Colpitts, co-founder of Signature family office.  "The real issues are around the children and lack of trust. Money ends up being the tool, particularly for the less-wealthy spouse, to punish the wealthy spouse."

Colpitts says many times couples leave the negotiating to their attorneys, with the result that an already stressful situation often escalates in vengeance. "The person who feels wronged in the marriage will always get the bulldog lawyer," Colpitts says. "That person is frequently the non-wealthy spouse and they go after the money even if it's more than they need. They can also tie up the divorce in court for years just to make the ex-spouse miserable."

Save money and stress with mediation

One way couples can prevent an extended battle in court is to go through mediation, Colpitts says. By sitting down together, with a professional trained to ensure a productive conversation, the two parties can ease the transition for the entire family. "Mediation allows grownups who have had a loving marriage in the past try to figure out what's fair," she adds.

This is particularly important when children are involved, says Colpitts. "If one spouse is much less wealthy than the other, there's a lot of bickering around what's a fair lifestyle for the non-wealthy spouse," she says. "If that spouse ends up with a very different lifestyle, it can be confusing and create some stress for the children going back and forth between the wealthy household and the less-wealthy household. It's not a problem you see as much in middle class," she adds.

Prevention is the best medicine

The best way to head off problems caused by a split is to spell everything out ahead of time. Prenuptial agreements detailing the division of assets in the event of a divorce are typically signed before the wedding takes place and can help ensure agreement between spouses.

But Colpitts says the business of writing and signing such agreements comes with a high level of emotion that can create a different set of problems.

While in the midst of wedding plans and dreams of future bliss, the conversation can be delicate. Colpitts says that, once again, rather than allowing an attorney with a potentially overly aggressive mindset decide the terms for the spouse who is not wealthy, it's healthier for the couple to sit down and discuss what they think is fair for each other should the marriage fail.

Thinking of splitting? Be prepared for the five ways divorce can cost you.

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8 Comments
John
June 05, 2014 at 4:44 pm

Susan, that pretty much sounds like what men have had had to do for decades !! Wife sat at home and didn't work and divirce happens and guess what, husband pays.

William Myers
June 05, 2014 at 1:43 pm

Disagree with your story. It is depending on the people involved. I am not rich but finically secure and just went though a divorce. I was very lucky indeed to only have to pay a very small percentage of what I am worth to the other party. That is because I took legal steps to protect my interest BEFORE I married. We were married for 10 years. Love is great but you have to protect your interests. The only advice I can give to a person that is thinking of making that commitment is to remember "The person you are going to marry is not the same person with a divorce is filed? Remember where you heard that statement from.

Susan
June 05, 2014 at 1:09 pm

As a nurse, I supported my ex-husband for 25 years, although he had a construction company in town. He would go off for 10 or 12 weeks a year to go fishing. He has no health problems, doesn't take any medication. His potential for earning is so much greater than mine. We live in New Jersey and were hit hard by Superstorm Sandy. There is a tremendous amount of construction here.

He petitioned me for LIFETIME support. New Jersey is setting a precedent for ex-wives to support their ex-husbands. So did I have to pay him? Yes!

Adele
June 05, 2014 at 9:34 am

Your article should be titled "For Wealthy Men Only". There are too many mothers out there who are being bankrupted and losing their children to wealthy men, to make such blanket statements.

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