Wealthy Divorcees in New York Not Immune to Effects of Recession
August 19, 2015
Across the nation, the newspapers are filled with stories of people too strapped to divorce or split into two separate households – and who are forced into bizarre sleeping arrangements, alternative legal remedies and creative settlement agreements. While many wealthier couples may have the money to divorce during a recession, they are not immune to the pain of today’s financial blows. These misfortunes can make a straightforward divorce between affluent spouses in New York more complex.Work and Wage Woes
Wall Street executives face job loss like other workers, especially if their companies are in serious financial trouble. Even if they survive job cuts, their wages and other compensation, such as bonuses, may be severely slashed. In addition, alternatives to income like stock options could be almost worthless in today’s market or could take years to vest. When any of these events occurs immediately before or after filing for a divorce, financial tension could reach new heights as couples or courts try to divide devalued assets and settle on spousal or child support paid from dwindling incomes.Property Problems
Property division that would normally be streamlined in a good economy can get ugly when a bad economy diminishes the couple’s assets. That penthouse on Park Avenue may have been worth quite a few dollars when the real estate market was at its best. However, with the crash of property values over the last few years, assets like pricey homes can quickly become heavy liabilities for moneyed divorcees. A property sale may take longer than usual, yield little or no profits to divide, or a mortgage may be so upside-down that selling is not even an option. If one spouse must inhabit the marital property, what will the other spouse do for housing?Ill-Fated Investments
For many owners of once healthy investment portfolios, the losses devoured by the presently sour economy are difficult to digest. This may also be true for couples on the verge of divorce, who may have to trigger investment losses now, rather than holding out for a market comeback. While some investments may be labeled as separate property, many may have been purchased, been commingled or appreciated in value during a marriage. These are considered marital assets up for equitable distribution by a court, if the couple cannot come to an agreement themselves.Lifestyles in Limbo
The effects of the recession will most likely not force wealthy couples considering, or entering into, divorce in New York to have to endure living together. However, the lifestyles that both husbands and wives enjoyed together may be in limbo while they sort out their asset division in a struggling economy. It is especially important to seek the advice of an experienced New York family law attorney during this tough financial period. Even if the moment to file for divorce has arrived, complex issues surrounding substantial income changes and the devaluation of assets may still affect a high-net divorce.