High Asset Divorce: New York Attorney Chaim Steinberger

The Unique Challenges of a Wealthy Divorce

Video transcript:

Chaim Steinberger:

When people are rich and powerful, they can effectuate it more, and their negative energy has more explosive impact and can be more damaging.

Rob Rosenthal:

If you're getting a divorce and you have a lot of assets, do you know how to get the special care you need? We're going to find out right now, because that's what we're going to ask the lawyer.

Hi again, everybody. I'm Rob Rosenthal with askthelawyers.com, and my guest is New York City attorney Chaim Steinberger. At the end of the interview, remember, if you still have some questions that didn't get answered, head over to askthelawyers.com and click where it says “Ask a Lawyer”, and you can put your question in there. Chaim, thank you for joining us and helping us out again today.

Chaim Steinberger:

It’s always my pleasure to be with you, Rob.

Rob Rosenthal:

So we're talking kind of a special area here, a high assets divorce. What qualifies as high assets?

Chaim Steinberger:

So, high assets could be very different. It could be half a million for one couple, it could be 30 million for another couple, but generally speaking, this is what's interesting; even the smallest, simplest case always has these unique issues that need to be tracked down, that need to be handled carefully. But of course, the greater the estate, the more assets that they have, the more involved that their holdings are, the more important it is to have a clever, smart, straight lawyer who can both develop the case properly, organize it properly, and also settle it so that you're not wasting everything you've spent your entire life building just to get divorced.

Rob Rosenthal:

So what's different about a high asset divorce than your regular? What are some of the challenges?

Chaim Steinberger:

So just about everything is different. In a small money case—now, small money doesn't necessarily mean somebody might be an employee of a corporation and make $300,000 or $400,000, but then at the end of the year, they get a W-2. You know how much money they earn, you know what the income is, you can do the calculations, you could move on, you can make the determination. Then you have somebody else who has a business. Now, once you have a business, the valuation of a business becomes very complicated; the moment they have a business, now they may get a certain amount of income through W-2 as a salary, they may get some income as profits from the business, and then the business might pay some personal expenses. Some of those are legitimate, some of those may be pushing the envelope, and so the people who value businesses are always on the lookout to take a look and make adjustments for personal expenses that are run through the business that may or may not be borderline legal. So, finding the income, determining what the real income is, finding out there may be income paid immediately, there may be deferred compensation, there may be stocks, there may be stock options, there may be bonuses. Somebody may say, “Hey, I'm getting a bonus, and I'm about to get divorced. Why don't you hold off on the bonus and give it to me next year?” But if that bonus was earned during the marriage, then that bonus is marital property. If the bonus is being paid for future work, if you get a bonus now because you're promising to stay at the company for the next 10 years and continue working, then the bonus is for future earnings, and that's not marital property.

So every issue becomes more complicated; every issue becomes more involved. If there's a business involved then the business has to be valued. Valuing businesses is its own sort of deep and broad pool that has to be understood, the methods of valuation. So that of course creates different issues, and the lawyer has to be sensitive to all of this and be able to see the fires but also understand what each tree in the forest is, and how the accumulation of trees makes up the forest.

Rob Rosenthal:

In your experience, are these high asset divorce, do they tend to be, let's say, uglier or more contentious than others? And how does having the right attorney help you in those kinds of situations?

Chaim Steinberger:

So the funniest thing is that my nastiest, longest running divorce has been two people that didn't have much at all; instead they have two televisions and one came in to the other and said, “You take one television, I'll take the other.” And the other one said, “No, my mother is getting the other television.” And they were off to the races. So it's not necessarily. I would say that when people fight really, really hard, it's because they've been wounded; they're hurt, they're angry, they're disappointed. It raises up their own insecurities. There may be a way to help people overcome their insecurities. Maybe one spouse isn't psychologically ready to get divorced; in that case, when I'm working with my clients, I say, “What can we do to help the other spouse overcome that?” If the other past is injured, they feel like they're being rejected, how can we lift them up so that they can overcome that?

So the amount of battle and the amount of negative energy in there is not necessarily determined by the amount of money that they have. However, when people are rich and powerful, they can effectuate it more, and their negative energy has more explosive impact and can be more damaging, more damaging to the other spouse, more damaging to themselves, and more damaging to the children. So, of course, you and I, Rob, have spoken about this, being able to use a different approach. You know that I’ve published on divorce without destruction. One of my clients has dubbed me the divorce whisperer; she says he used the perfect blend of iron fist and velvet glove. If I would have pushed harder, I would have provoked a backlash. If I would have been any softer, I would have gotten bulldozed. So being able to read the sense of the room and the people, being able to treat everybody with dignity and respect so that they can settle with you, so that they don't feel they've got to challenge you and fight you on it; so that they don't waste everything they've built a lifetime building on the lawyers and on the battle, but that they can keep it for themselves and pass it along to their children. And that's so important, particularly in high asset divorces.

Rob Rosenthal:

In any divorce when it comes to a division of property and that sort of thing, that's always difficult. But in these, I would imagine even more difficult, yes?

Chaim Steinberger:

It's even more difficult, particularly when somebody is used to getting their way. They're rich, they're powerful, they have people catering to their every whim and wish. And so being able to say, “Wait a second. Yes, I know. Don't worry. You'll be okay at the end of this, but we've got to treat the other person; we've got to give them their due too.” So you can't push through your own will by brute force. There are other players, there's the law, there's the will of the other people. So it’s about figuring out how to make it happen. And when people are rich and powerful, they are not used to ameliorating their desires.

Rob Rosenthal:

That's a very political way of putting that. So how important is it to have an attorney on your side who is familiar and experienced and knows how to handle these kinds of things?

Chaim Steinberger:

It's incredibly important. People who don't have a lawyer who know the law or the intricacies of the law—many people know sort of the top line level of the law. I was speaking to somebody the other day, and I said “When you walk into court, the first thing the judge will say is, ‘A, B, C, D,’ However, if you point out X and Y, the judge can come to the conclusion of Z.” And the person was taken back. “You mean the judge won't follow the law?” And I'm like, “It's not quite that simple.” There's a superficial law, but then there are the nuances of it, and you have to build it and you have to present it right to the court. And of course, when it's a high asset divorce there's a lot of money at stake, so it becomes important for the lawyer to know that. A mistake by the lawyer could mean a lot of money to the client. And because tempers are running hotter and because people are trying to push through using brute force, it becomes important for the lawyer to make their own client feel safe, and then be able to conduct a negotiation in a way that's productive instead of destructive. So these become very, very complicated and not everybody can do it.

Just recently, I was talking to a partner in a major law firm, and I was trying to get the four of us—me and my client, the other lawyer and his client—into a room, and the other lawyer said, “Oh no, I never find that that's productive.” And I'm like, “There's a trick to doing it.” It means that I need to control my client and keep the conversation productive and positive, and he has to control his client, because I would never let another lawyer beat up or criticize my client. So he has to take responsibility for controlling his client, so that we continue to have a productive conversation. I was surprised that somebody at his caliber and his level of practice didn't have those skills. Having those skills make a difference.
I was negotiating with somebody—it was an all-day negotiation—at some point I was talking, and the husband who was the other side, the husband's lawyer started to say something and the husband picked up his hand in front of his lawyer and said, “Stop, I want to hear what Chaim has to say.” And I take that as a huge compliment, for an opposing party to shut his own lawyer down and want to hear what I have to say when his lawyer is there to protect them, and I'm there to protect my own client. But that, I thought, was a testament to the dignity and respect he knew that I was showing him, and how I was being straight with him. So I had gained his trust enough for him to shut his own lawyer down.

Rob Rosenthal:

Lots of very helpful information is always, Chaim. Thank you for taking some time to answer our questions.

Chaim Steinberger:

It’s always my pleasure.

Rob Rosenthal:

So that's going to do it for this episode of Ask the Lawyer. My guest has been New York City attorney Chaim Steinberger. Remember, if we didn't answer any questions, you can head over to askthelawyers.com, click on the button that says “Ask a Lawyer”, and you have a chance to ask some questions right there. Thanks for watching, everybody. I'm Rob Rosenthal with AskTheLawyers™.

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