Divorce can be a stressful and emotionally taxing undertaking for anyone, regardless of physical or emotional health and without respect to financial status. While not all divorces are hard-fought acrimonious affairs, even the most congenial parting of the ways necessarily brings with it numerous changes and challenges for two people who have planned to spend the rest of their natural lives together. The emotional variables of divorce can post particular challenges for individuals who already manage one or more psychiatric disorders, as defined by the American Psychiatric Association (APA), but the grief, stress, and uncertainty that often accompany divorce can take a toll on anyone’s mental health, with or without a history of mental illness. High net worth divorces can be both easier and harder than those experienced by less-affluent couples, as financial abundance can ameliorate some potential stressors while introducing or exacerbating others. If you are navigating or anticipating a high net worth divorce, take steps now to ensure you have the support you need. To learn more, call Sullivan Shick at (480) 719-2558 today and set up a confidential consultation with a seasoned Arizona divorce attorney to discuss your needs.
How Does High Income Affect Mental Health?
Perhaps because direct experimentation with study participants’ livelihoods is not a research protocol optimized to pass muster with human subjects research (HSR) institutional ethics reviews, much of the research on possible links between wealth and health (mental or physical) has been associational. In a typical model, researchers collect survey or census data (often from more than one source), identify correlations between household income levels and various measures of individual well-being – from physical and psychiatric diagnoses to self-reported experiences of stress, anxiety, satisfaction, hope, and so on – and attempt to draw plausible inferences from the patterns that emerge.
Limitations in Research on the Impacts of Income on Mental Health
As always in associational research, it is important to bear in mind the scientific community’s axiom: Correlation is not causation. Conclusions based on even fairly strong correlations between financial status and mental health status should be interpreted with caution (as many researchers will hasten to point out). Another potential limitation, from the point of view of high net worth individuals seeking to better understand their own potential psychological risks and outcomes as they approach a divorce, is that much of the published research is organized less in terms of the direct impacts of income on mental health and more on the absence of adverse conditions experienced by low-income peers.
How Does Being Wealthy Affect Mental Health? – What the Research Says
While it may be true that money cannot buy happiness, in many cases access to adequate financial resources can help to secure life conditions that minimize specific types of stress, especially those associated with persistent uncertainty. Scarcity often incites a stress response by demanding a constant juggling act, as individuals urgently shuffle inadequate resources from one emergency to the next. The constant struggle to add to the supply, exacerbated by the high costs of poverty such as late fees and goods purchased in small quantities that levy a higher per-item price compared to bulk alternatives, puts individuals in low-income households at risk for certain kinds of negative impacts on mental and physical health that arise from chronic stress.
Wealth, in its simplest terms, is the opposite of scarcity. Simply having sufficient income to cover essentials like shelter and the tools or transportation costs to continue earning a livelihood can give wealthier households a “buffer” against the psychological impacts of living under conditions of chronic precocity. However, these advantages may only accrue up to a point. A 2010 study published in by the Proceedings of the National Academy of Sciences of the United States of America (PNAS) under the organization’s “Psychological and Cognitive Sciences” heading found that “[e]motional well-being” increased in direct proportion to income up to about $75,000 per year – after which point, further increases in wealth no longer proceeded in tandem with improvements in participants’ own “life evaluations.”
Are Rich People Less Likely To Be Depressed?
One of the interesting features of the PNAS study is that the researchers specifically note that low income “exacerbates” the psychological misery of a variety of painful life experiences, including divorce. A natural assumption to make is that high net worth might correspondingly alleviate the same kinds of pain – but the reality, reflected in the upper limit for close correspondence between income and life satisfaction, may be that the grief and loss that often accompany the breakdown of a marriage are unaffected by income, and low-income individuals who report greater levels of distress when going through a divorce than their high net worth peers are not experiencing divorce differently so much as they are processing divorce at the same time that they are navigating sudden economic precarity.One of the interesting features of the PNAS study is that the researchers specifically note that low income “exacerbates” the psychological misery of a variety of painful life experiences, including divorce. A natural assumption to make is that high net worth might correspondingly alleviate the same kinds of pain – but the reality, reflected in the upper limit for close correspondence between income and life satisfaction, may be that the grief and loss that often accompany the breakdown of a marriage are unaffected by income, and low-income individuals who report greater levels of distress when going through a divorce than their high net worth peers are not experiencing divorce differently so much as they are processing divorce at the same time that they are navigating sudden economic precarity.
High Net Worth Divorce and Mental Health Challenges
To some degree, how one approaches the topic of mental health in a high net worth divorce will depend on whether the individual in question is already managing a known condition. Someone entering the divorce process with an existing diagnosis for one or more mental health disorders will want to take proactive steps to anticipate potential challenges and work with their health care providers to monitor for any needed adjustments in their treatment protocol, such as adjusted doses of maintenance medications or increased frequency of adjunct therapies. Whether they are navigating divorce in the context of an existing mental health problem or not, divorcing spouses may find it helpful to seek support from a licensed therapist to not only process their emotional experience of divorce, but develop practical strategies for managing the virtually inevitable cognitive juggling act that often comes with making radical changes in their everyday routine, from potentially changing homes to reconfiguring the distribution of household chores to shifts in parenting responsibilities.
All of the above remains true regardless of the economic status of the parties involved. However, some of the challenges high net worth spouses will encounter are distinct from those commonly faced by lower-income couples. High net worth divorce can make some aspects of divorce easier while also complicating others.
High Net Worth Divorce – Community Property
Arizona is a community property state, which means that in a divorce settlement established by an Arizona family law judge all marital property will be divided equally between the parties. In a high net worth divorce, this equal division of property is likely to mean that both parties come out of the divorce with sufficient resources to establish a new household and take care of their immediate essential needs while they adjust to their new lifestyles. There are, however, a couple of caveats to keep in mind:
Separate Property
Any assets that belonged to either spouse prior to the marriage remains the separate property of that spouse and is excluded from the division of marital assets during divorce proceedings. Any property acquired by either spouse after a Petition for Dissolution of Marriage has been filed with the Arizona Judicial Branch similarly remains the separate property of the spouse who acquires the property, regardless of which spouse filed for divorce.
Community Debts
High net worth couples not infrequently have comparably elevated levels of debt. In general, a high net worth couple accumulates these debts in the assumption that their shared income will make repayment feasible; some of the debts may even be incurred as part of the couple’s overall financial planning and investment strategy, as is common with real estate speculation and second home purchases expected to build equity. Community debt can become an important and troubling factor in high net worth divorces when the debt is shared but the resources used as collateral or down-payments are categorized as separate property.
Community vs. Separate Liability for Debts in a High Net Worth Arizona Divorce
Arizona’s community property laws include provisions for the equal division of debts, like assets, between the divorcing partners. § 25-215 Ariz. Rev. Stat. (2023) does establish that neither spouse is liable for the other’s “separate debts” (analogous to “separate property”). However, the criteria for delineating which debts will be considered separate are not exactly symmetrical with those used for determining the allocation of assets.
In determining the extent of shared liability for debts incurred by either spouse prior to the marriage, Arizona courts will weigh the value of the contributions made by that spouse to assets defined as community property but that would have remained the sole property of that spouse, had they not married. The complexity of the considerations demanded by the community debt statute can frustrate even the most financially astute Arizonan, so individuals concerned about the division of debts as well as assets in their high net worth divorce may wish to schedule a conversation with Sullivan Shick to review their situation with an attorney experienced in handling Arizona high net worth divorces.
High Net Worth Divorce: Hidden Assets and Mental Load
These complexities regarding division of marital property can be especially labyrinthine in high net worth divorces because of the advanced financial planning strategies often used by affluent households. While the greater total dollar value of a high net worth couple’s financial resources might in some ways seem logically suited to mitigate the stress often associated with divorce for lower-income individuals, the complex arrangements with which these resources are (often) managed can make the disclosure and discovery process exceptionally confusing and difficult for spouses to navigate, particularly as they attempt to process their emotions about the end of their marriage.
Complex asset management strategies often present numerous temptations for one spouse to attempt to hide assets from their former partner, and from the court, during the essential discovery stage of divorce proceedings. High net worth divorces may therefore be especially susceptible to the particular kinds of acrimony that can arise when deceit is suspected but – all too often – difficult to prove. An Arizona divorce attorney familiar with the advanced strategies that may help to uncover hidden assets during high net worth divorces may be able to alleviate some of the uncertainty and anxiety a divorcing spouse may feel if they suspect their former partner of attempting to conceal assets in these situations.
Seek Help Navigating Your High Net Worth Divorce
As in so many other areas of life, the impact of high net worth divorce on mental health is not as straightforward as “good” or “bad,” “positive” or “negative.” Each individual’s experience will depend on a variety of factors, including any mental health conditions they are managing prior to the divorce, sources of stress or support external to the divorce proceedings, and the complexity of the couple’s finances as well as the conduct each spouse pursues during the divorce proceedings. While there is no single solution to ensure positive divorce outcomes, regardless of the former couple’s economic status, consulting with an attorney experienced in the specific considerations that often arise in high net worth divorces can be a valuable starting point for affluent individuals approaching the legal end of their marriages. Reach out to Sullivan Shick today by calling (480) 719-2558 to schedule a private consultation to discuss your needs.