If you had a $2 billion dollar net worth that you built together over a 25 year marriage, would you go for the “do it yourself” divorce? When does this make sense?
Tim and Edra Blixseth of California are doing just that. Robert Frank wrote an interesting article about their divorce process in the Wall Street Journal – see article. The Blixseths are the founders of the famous “Yellowstone Club” at Big Sky in Montana – a private club with members from the richest segments of our society, including other billionaires like Bill and Melinda Gates. Money, privacy, and discretion are key components of the membership. Frank interviewed each of them separately and was told the couple spent a single afternoon with 2 notebooks and a bottle of wine and finished in a matter of a few hours. Each listed the main assets they would like to keep and the inital lists seemed compatible. I am impressed! However, the divorce is not final yet. Rarely do we see this type of divorce where such a large amount of assets is at stake.
The Blixseths live in a community property state so there are some basic statues that they have to fall back on if the negotiations start to go south. To start with, a presumption that there will be a 50-50 split of all community marital assets, not including inheritances, is where you begin. No matter what process you decide to use in your dissolution (an internet divorce, mediation, collaborative law, litigation, or arbitration) make sure you do the discovery thoroughly on your community and separate assets – valuing the assets, establishing the tax basis, and cash flow available from each asset. Create a file on each financial asset to gather your background information. Each time you have a new fact or figure, add the information to the file.
Don’t forget to analyse ALL the income generated by your investments and employment. This includes such items as bonuses, stock options, deferred compensation, business perks, and profit sharing distributions by the company. Your divorce is made up of three important parts: the division of assets, the division of income, and the division of debt.
The Blixseths plan to keep their separate businesses, maintain joint ownership in the companies they currently operate, and share the 3 corporate jets.
I hope they will set an example for the wealthy and not so wealthy to show that an amicable, fair share divorce is possible if you are well informed and have done the thorough discovery needed to analyse the assets, liabilities, tax considerations, and the income. The couple has had their individual attorneys review the settlement prior to filing for divorce. I would think they are receiving legal counsel on the business aspects of their marriage assets and income. Tim Blixseth was raised on welfare and made his first fortune in the lumber business, which means he knows how to negotiate and structure a deal. Edra has had her own career as a designer and entrepeneur. My adivce to her is Trust but Verify! Know what your post divorce lifestyle will look like and how it will be financed over time.
When Jane Beasley and Jack Welch divorced the issue of income division was significant. Jane Beasley hired an economist to thoroughly outline her income needs in the period of separation and post divorce. She clearly established their marital lifestyle and the money needed to maintain that lifestyle. Their pre-nuptial agreement had expired and all the assets were up for discussion. Having a community property statue will help the Blixseth’s once the valuations are completed. Their 4 children are from previous marriages so the children shouldn’t be an issue and they say there is no scandal or affair – they have simply grown apart. This allows them to avoid 2 of the major emotional minefields in divorce – the children and infidelity.
I usually recommend the “do it yourself” divorce if there are few assets to divide and no children. I would always advise you to consult an attorney before finalizing your agreement. After all, you are dissolving a legal contract of marriage. If you don’t want to use an attorney, try the following resources to gather information:
1. State and local bar associations to understand the statutes in your state
2. Women’s law centers
3. Local public libraries and univeristy law libraries
4. Books on divorce and family law – from the legal and financial aspects. Go to Amazon.com to start your research.
5. Internet websites focused on divorce. Two popular research sites are Westlaw and Law Info. These are subscription based sites, but there are a number of free sites as well.
What you don’t want to do is start “interpreting” the law – too many times I will have a client tell me their spouse has been on the internet and says “this is the way it is….” Statues are set through the court system. Most divorces settle outside of court through mediation of one type or another, collaborative law or arbitration. In the first two instances you compromise and negotiate your own divorce based on the statutues and this can be very different than what you would receive in a courtroom and litigated divorce. Too many times I see one person being emotionally blackmailed by a controller in the marriage promoting a no attorney divorce settlement. This is not the time to trust without verification of all the facts.
If you want to learn more about what process would work best for your divorce read Chapter 3 “What Method is Best for Your Situation” of Fair Share Divorce for Women.