Ilan Hirschfeld, Partner-in-Charge of the New Jersey Offices, Featured in The New York Times Article "From a Prominent Divorce in the Affluent Class, Lessons for All"
New York Times
By Paul Sullivan
Excerpt:
If all goes well, we’ll never hear much about Rupert and Wendi Murdoch’s divorce. The News Corporation chief executive and his wife will reach a settlement out of court for his third and her second divorce. If talks break down and the divorce goes to trial, however, we could be in for a round of sensational stories.
Over the years, I’ve tried to avoid writing about big money divorces like this. I’ve just been a bit prudish about something that is at best sad and at worst tragic. I always think of the children. But there is certainly plenty of practical advice to be gleaned from such an emotional issue, which is why lawyers and financial planners should tune in to the salacious gossip.
What little is known — or can be logically assumed — about the Murdoch divorce provides lessons for people with far less money.
There are at least four areas in the Murdoch divorce that other affluent people need to consider if they find themselves served with divorce papers.
AGREEMENTS
In the Murdoch case, there is reportedly a prenuptial agreement and two postnuptial agreements that modify the original contract.
Ilan Hirschfeld, national leader of the marital dissolution practice group at Marcum, an accounting firm, said postnuptial agreements generally solidify the prenuptial agreement and make the separation of assets cleaner. But if there is only a prenuptial agreement and it is very old, he would use forensic accounting to challenge it.
“If I’m representing the Mrs. and she’s not happy because her husband is making 10 times what he was making in the beginning, I’ll go back and say, ‘Did you disclose all the assets?’ or ‘Was she properly represented?'” he said.
ASSETS
Dividing assets between spouses is rarely as simple as deciding to split it 50-50 — or even 60-40. A lot depends on what kinds of assets are involved.
Appraisers and lawyers draw a distinction between passive and active assets. A passive asset would be a house or a stock portfolio, but not all of them can be parceled out.
The calculation changes if the business was started while the couple was married. Mr. Hirchfeld said that a spouse of a business owner who stayed home and raised the children is generally awarded somewhere between 30 to 35 percent of the business.
“If the wife says ‘We started the business together,’ you have to look at how active the role is,” he said. “I’ve had divorces where they can’t live together anymore but agree to run the business together. The courts don’t like that — it’s a time bomb waiting to happen.”
