The Wall Street divorce circa 2008-2009: What should a wife expect?

Well, Wall Street imploded late Summer, 2008 and it’s been a bumpy ride ever since. You better believe that a lot of marriages are strained to their breaking point. And a lot, if not all of that strain, can trace its roots back to money. Couples are pale over the decimation of their networth. Their financial prognosis is bleak, yet the bills keep rolling in and there won’t be a bonus to help offset the shopping, philanthropy and Aspen holidays that took place when the good times were rolling just months ago.
Who could have imagined that Bear Stearns, Lehman Brothers, Merrill Lynch and Morgan Stanley could have been the blood baths they so quickly became in 2008? And what does it mean for those couples who once were the toast of Manhattan/Hamptons/Aspen society, but now can barely bear to look each other in the face on account of all the horribleness they’ve been hurling at each other since the threat of pennilessness began to stress them within an inch of their sanity.
As bad as things are, is it a good time for those folks to talk about divorce?
It’s a tough call. Because when people get accustomed to “living well” it is very difficult to get divorced in a bad economic climate and be forced to live like paupers. And this essentially is what is going to happen to some women whose husbands were investment bankers on Wall Street. These wives are accustomed to living well. They have the nannies, the chauffeurs, the home in the Hamptons, Aspen and Manhattan. They shop at all the exclusive stores like Bergdorf, Barneys, Saks and Louis Vuitton. They only wear Manolo Blaniks.  They wine and dine at Cipriani’s and Masa, they go to fancy balls at the Metropolitan Museum of Art decked out in couture by Oscar De La Renta and other renowned designers.
Now, dear husband is probably drinking, doing drugs, hitting, staying out all night, sleeping with a former best friend of the wife’s, and she has to think about whether this is the right time to formally end things and serve the bloke with divorce papers. I was reading on New York Social Diary about a hypothetical investment banker and his wife and how the economic crisis has reduced income from, say, $1.5 million to $250k. I would say that is pretty conservative. I think the wounds go a lot deeper than just that.
In terms of equitable distribution and spousal support, where does that leave a wife? Practically destitute if you ask me. I would almost be tempted to tell her forget about the divorce if money is an object. I would almost be tempted to say it is a bad time for a divorce if you are the wife of a man so closely affected by the implosion of Wall Street as we know it. But what is she to do if he insists that the marriage is over?
Well, she has to either fight the divorce, or accept that she is going to need to find a job if she has been home raising kids for the duration of the marriage. She is not going to be in the social circles she’s become accustomed to because, frankly, the money just isn’t there anymore. So forget the philanthropic balls and galas, forget the summer house in Sagaponack. Forget the ski lodge in Aspen. And forget all those closets full of Manolo Blaniks, and the art work. Forget the bling too.  Forget also getting the court to order private school for the kids, forget the four nannies, forget life-long alimony. Forget the stock options and the signing bonuses, and…gosh, I should stop. Even I am getting stressed out.
Actually – and I hate to be the bearer of bad tidings but I have to tell you the brutal honest truth so that you can make a decision about whether divorce makes any sense for you right now – but, you have to consider that you could be walking out of the marriage with absolutely NOTHING and you have to ask yourself whether this is something you can live with. Because a lot of these investment bankers lived on leverage and arbitrage. And, so, what did they end up with? The short end of the stick. And, so, what does that mean? It means they owe more than they own; and now chances are they are out of job, or their compensation packages have been severely cut down, and they are about to lose their job even though they may not know it yet. And so, in the end, there is nothing to speak of to equitably distribute if they get divorced from you. Nothing. Do you understand nothing?
But if you wait, say another year or so, things might change both in the economy and in your marriage. I mean, things could also always get worse, but if you are an optimist (I am not but maybe you are) then you believe that things could change for the better – if not with the marriage, then surely with the economy. And then, it would be a more financially advantageous time to seek that divorce.
So, what is it going to be?