Partnership – An Interesting New Twist
Although this trend has not yet made it to the world of CPAs and CAs, it may, given the amounts of money some of them are bringing home and the fact that the majority of them are still men. The accountant is, for the most part, a regular guy, a risk averse, rigid, heads-down geek of a guy, who usually doesn’t know how to handle new fame and great fortune. I have seen my share of them, suddenly after making partner, turn in the reliable trusting wife, often a fellow accountant (or a nurse or teacher) that he met in college, for a new model (literally and figuratively). And when he realize he has a franchise on potentially making mid to high six figures or more until he turns 60, he starts smoking Cuban cigars he smuggled into the US from Cabo, taking scuba diving trips to Belize and buys that Porsche.
The FT describes how the postnuptial agreement trend is growing amongst hedge fund partners.
Divorce hedge-fund style a boon for lawyers
“The massive infusion of cash into the so-called hedge fund communities in New York, Connecticut and California has proved to be fatal to many marriages – and a windfall for lawyers, psychiatrists and forensic accountants who specialise in the super rich.
“There is no question that a huge infusion of wealth to relatively young people has a disastrous effect on the marriage’s stability,” says Bern Clare, a Manhattan divorce lawyer…
When hedge fund managers turn to postnuptial agreements in an effort to protect their new wealth and trading strategies from prying spouses, they are entering an uncertain legal world. Postnuptial contracts are agreements to split marital assets signed after marriage. They have a somewhat unclear legal status in the US, especially in comparison with prenuptial agreements, which are signed before marriage, and have been well-litigated…
In the US, “postnups” are regulated on the state level. Most states do not specifically mention the agreements in their domestic relations code. A few, including Ohio, ban them. Elsewhere, appeals courts have tended to accept agreements signed as part of an attempted reconciliation but, says Sean Williams, a Harvard Law School lecturer, be sceptical when one party simply gives up claims on the other’s assets.”
You may think I’m going to blame the guys, but it’s just as often that the women in these situations make all women look bad. I’m all in favor of getting what’s fair, but making a guy pay for a lifestyle you couldn’t get with your own brains and ambition is not my cup of tea. The mistake men make in these situations is allowing their egos to take over and having children with someone they aren’t going to stay married to. Talk about buying the annuity…
I will say, however, that any time you fix the price of getting out of an undesirable marriage, you raise the chances that one party will be willing to pay that price. Many men, and women, will stay and work things out if there’s any uncertainty as to the financial outcome of splitting up.