The New Division

by Natasha Wolff | December 4, 2015 2:00 pm

High-net-worth divorces are notoriously nasty. They can destroy reputations and cost millions in legal fees. They also threaten company stock prices and upend promising political careers. Worst of all, they play out in the tabloids like bad courtroom dramas, with no sordid detail too personal to be picked over on the morning talk shows.

But just as the recognition of gay partnerships has changed the way we think about marriage, so, too, are spouses redefining what it means to break apart. Today’s couples, while they may sniff at the New Agey language, are becoming increasingly interested in “consciously uncoupling.” That’s the term Gwyneth Paltrow and Chris Martin used to describe their intention to divorce[1] in 2014, announced on the actress’ website, Goop, with a picture of the couple sitting cross-legged on the grass in a happier time. And in many cases, “conscious uncoupling” may mean not even divorcing at all.

Take, for example, the arrangements of two of the richest men on earth, Google co-founder Sergey Brin and his company’s executive chairman, Eric Schmidt. Both billionaires have been in the news recently for marital infidelity: In 2013, Brin made headlines over a reported affair with one of his Google employees; since the late 2000s, the gossips have trailed Schmidt as bombshells were photographed on his 195-foot Oasis yacht. Both men are still married, yet they’re living, for all intents and purposes, separately from their wives. (Wendy Schmidt once remarked that she enjoys living with her husband only seven months out of the year. Anne Wojcicki, Brin’s wife, is less happily separated, though the two have attended parties as a family and have no reported plans to divorce.) Most recently, Shelley Sterling told Barbara Walters that she and Donald Sterling had been separated for the last year, but that her lawyer and accountant said “this is not the time” to move forward with a divorce.

It’s a calculation divorce coach Laura Miolla sees married couples making all the time. “Couples maybe wait until the kids go away to college, one [partner] moves out, and then they say, ‘Why should I get divorced?’ ” she says. “ ‘Why should I go through that horrible process?’ ” When you can afford separate houses, separate nannies, separate vacation spots and separate friends, what else would you get that you don’t already have?

While statistics on the trend are hard to come by (neither state nor federal governments systematically track the different ways couples dissolve their unions), experts say they have “definitely” seen an increase in the number of couples foregoing divorce entirely. According to Ani Mason, a divorce attorney who specializes in settling high-net-worth divorces, more couples are realizing that they can better protect their assets (and their reputations) if they avoid litigated warfare. “A lot of people are wising up and saying, ‘That’s not what I want to go through,’ ” she says.

This is especially true in cases where a joint business is involved. One of Miolla’s clients has been living separately from her husband for six years now and says there’s little chance of getting back together. But the couple had built a thriving med spa together over several decades of marriage, and the thought of going through a lengthy valuation and appraisal process in order to split up the business proved too daunting for the former high school sweethearts. When it finally came down to it, says the wife, it was just ‘easier’ to let things be. “He says he doesn’t want a divorce because dividing everything will be a big headache,” she says. “For me, a lot of the reason is I have been afraid of change. I was a stay-at-home mother up until six years ago so the thought of working outside of home or our business is a little threatening.” Given their tangled finances, the business partners and co-parents of five are dating other people but neither plans on making their de facto divorce official any time soon, even though she admits that being married has affected her dating life. “Men typically do not want to date a married woman,” she says. “And I feel insecure about it, so it keeps me from entering a serious relationship too.”

Staying married because it’s easier is all well and good, of course, so long as you trust your spouse. When there’s been an emotional betrayal, couples who stay married purely for business purposes often go one step further and obtain a “legal separation,” just in case the relationship turns sour. In legal separations, the couple doesn’t actually go through a divorce but instead draws up a legal contract that speaks to issues like child support and a division of assets. Its flexibility makes legal separations an appealing option when dealing with complex joint asset structures. More importantly for top executives, legal separations can be kept entirely private.

“Once you file for divorce, that’s public information,” Mason states. “Whether or not you want your shareholders to know about it [doesn’t matter]. You don’t really have a choice.” And it turns out that information can have major consequences. A recent Stanford study found that a CEO’s divorce can negatively impact company performance, drive down the price of shares and even result in the CEO retiring prematurely. Given those figures, it’s no wonder Warren Buffett remained married to his wife for 27 years after separating. (In a nod to the fickleness of enduring emotions, Buffett’s wife Susan introduced him to his next girlfriend when they separated in 1977; the threesome remained so close they even sent out joint Christmas cards until Susan’s death in 2004.)

“[Breaking up] is no longer one size fits all,” says Susan Pease Gadoua, a licensed therapist and divorce expert in San Francisco, especially given the rise of prolonged cohabitation, children born out of wedlock and couples foregoing marriage altogether. “They’re basically personalizing the system to meet their needs versus trying to fit into the system’s needs,” she says. “And I think that’s a healthy trend.”

Granted, in many circumstances, remaining even financially tied to a hated spouse is easier said than done. While the number of couples eschewing divorce in favor of permanent separations is on the upswing, most people still prefer to renege on their vows the old fashioned way. In that case, people seem to at least be trying to keep things as far from Paul McCartney–Heather Mills territory as possible—if not for the kids, then at least for the bank balance. “In my experience,” says Mason, “people who go through a less adversarial process are more open to being cooperative and creative in crafting a settlement, and so you end up with results that are more beneficial to both spouses.”

Few divorces better illustrate the hazards of scorched-earth litigation than that of real estate moguls Jamie Luskin and Frank McCourt. Theirs was a battle so vicious it was dubbed the “War of the Roses” by the media. With $1.2 billion and ownership of the L.A. Dodgers at stake, the McCourts duked it out for four years, with all of Los Angeles watching. By the time the dust had settled, the humiliated pair had become the scourge of Major League Baseball and had reportedly spent a collective $20 million in legal fees. It was one of the most expensive divorce cases in California history. Maybe “conscious uncoupling” isn’t such a bad idea, after all.

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