By Donna Bertaccini
Nothing seems to grab the public’s curiosity like a good old knock down, drag out, fight to the finish divorce among the rich and famous.
Divorce is, of course, big business in the United States. Some 55% of US marriages there fall apart, compared with, say, 38% in France.
Recently, a string of high-profile cases – ranging from billionaire George Soros to legendary company boss Jack Welch – have made America’s wealthy especially twitchy.
Rich couples are now advised to prepare their marriage vows with the same due diligence as they would a big business deal.
See you in court
Lorna Wendt, who founded the Equality in Marriage Institute in New York, knows a thing or two about the big business of marriage.
In 1997, after more than three decades of marriage, Ms Wendt was thrust into the public spotlight when her husband, former General Electric Capital boss Gary Wendt, asked for a divorce and offered her 10% of their assets.
Determined to fight for her equality in their marriage, Ms Wendt launched a legal battle that made her a pioneer in the emerging debate on the business aspects of marriage.
“My marriage started in a quaint church in small-town America,” says Ms Wendt.
“My divorce ended in packed courtrooms and on the cover of Fortune magazine. I learned about the business side of marriage the hard way. No one should enter a marriage without discussing a prenuptial agreement.”
Legal eagles
No wonder, then, that an increasing number of the wealthy consider it prudent to get themselves a good lawyer – make that a very good lawyer – before they wed.
William Zabel, of the Manhattan law firm Schulte, Roth & Zabel, is one of the best.
His clients read like a Who’s Who in the financial, entertainment, political, philanthropic and sports worlds.
Aside from Mr Soros, there’s author Michael Crichton, radio shock-jock Howard Stern and human-rights activist Kerry Kennedy- Cuomo. Last year, Mr Zabel represented the wife of Tour de France winner Lance Armstrong, and most recently author Nancy Friday in her divorce from media magnate Norman Pearlstine.
Making demands
A prenuptial agreement, Mr Zabel explains, is a legally binding contract that treats marriage as the start of a business venture.
Legal cunning helped Mr Soros get off lightly
“There’s no denying that certain kinds of provisions can boggle the mind.”
For example, he has seen one that cuts any payout to a wife who puts on more than ten pounds above her wedding-day weight.
Clauses are routinely known to divvy up season seats to sporting and cultural events and even address the number of times per week sexual relations are to take place.
Mr Zabel has even seen a case where cash was to be set aside to finance a husband’s desire to have his remains cryogenically frozen.
Principles of prenups
Trial lawyer Dan Webb, a frequent adversary of Mr Zabel’s, reckons that lack of attention to a few simple rules can be a recipe for legal troubles.
First and foremost, if one party is much richer than the other, it is essential for that individual to make a full disclosure of all assets.
Otherwise, if the prenup is found to be less than truthful there will be cause for a court to disallow the prenup.
Second, Mr Webb stresses, “make sure each party gets their own lawyer. It’s important for there be no conflict of interest.” In particular, avoid entanglements, such as one party recommending a lawyer who is a personal or business friend to help in negotiating.
Third, “avoid prenups that have a self-destruct clause after a period of time.” Mr Webb’s client Jack Welch saw his assets gouged after his second divorce precisely because of such a clause.
Finally and often times the most difficult to arrange, is that both individuals involved “make sure that the agreement is fair,” emphasises Mr Webb.
Welch worsted…
Recently, George Soros and his second wife Susan divorced after two children and 25 years together.
Mr Zabel won’t say exactly how much the settlement was for, but published reports indicate that Mrs Soros quietly settled in the neighbourhood of $80m.
By stark contrast, take a look at what happened in the highly contentious Beasley-Welch divorce. Despite Jack Welch’s fearsome boardroom reputation – he was widely admired for his 20-year stint running General Electric – Ms Beasley landed upwards of a whopping $180m.
Why then the glaring discrepancy between the two settlements? Mr Soros is far richer than Mr Welch, was married twice as long, and had children.
… Soros smug
But while Mr Soros had a prenup, Mr Welch had none.
Ms Beasley, a former lawyer herself, had cleverly crafted a provision that triggered a self-destruct clause which went into effect after 10 years of marriage.
“It is rare, if ever,” says Mr Zabel, “that a monied spouse would end up being disadvantaged by a prenuptial — unless his or her lawyer did a poor job.
“Without one just about everything can, and will, be up for grabs.”
