Divorce Lawyer Breaks Down the Hidden Costs of Ultrarich Splits | WSJ

TL;DR

High-net-worth divorce attorney Jacqueline Newman reveals that maintaining a wealthy New York lifestyle post-divorce costs roughly $1.4 million annually after tax.

Key Points

• 1.High-net-worth divorce in New York typically involves assets above $20 million. Clients include hedge fund managers, CEOs, and entertainers, with cases built around a 'statement of net worth' documenting all assets, liabilities, expenses, and income tax returns.
• 2.A typical ultrarich New York lifestyle costs roughly $1.4 million per year after tax. Breakdown includes $324K housing (Hamptons + NYC), $240K private school for two kids, $420K recreational expenses, $96K food, and $42K clothing.
• 3.Clients often request inflated post-divorce budgets beyond their actual marriage lifestyle. New demands include gym trainers, more plastic surgery, and nicer clothes — one client even tried to list a plastic surgery budget as a formal line item on their net worth statement.
• 4.Letting emotions drive divorce strategy is a critical mistake. Clients expecting a judge to punish a cheating or dishonest spouse with a larger settlement are wrong — Newman advises separating emotional responses from business decisions to achieve better outcomes.