“I wonder if the sad I’d be without you would be less than the sad I get from being with you.”
– Tom Wambsgans as he contemplates the state of his marriage to Shiv Roy on the hit HBO series ‘Succession’
The words are so perfectly plain and simple, and yet so cutting. For many of us, these words so succinctly summarize a fork in the road on a life’s journey whose direction is no longer known to us. Because a choice now has to be made, and it’s one we thought we already made when we decided that together was going to be forever back at the altar.
As a financial advisor to high-net worth divorcees in Los Angeles, I walk beside clients on this road every day. Helping them navigate the peaks and valleys of their ever-evolving financial situation – creating new income streams, splitting assets (and sussing out hidden ones), making big decisions about property, and ensuring that the new budget fits into the new post-divorce financial reality.
As viewers remain glued to their screens for the fourth season of HBO’s smash hit “Succession,” the financial impact of Tom and Shiv’s decisions around their marriage and divorce could easily become lost in the vortex of drama and intrigue provided by the salacious storylines and unpredictable characters. There are some very real parallels to the fictitious lives being lived on the show, and some very practical lessons we can take away and apply to our own relationships and marriages.
The ‘Unconscionable’ Prenup
Siobahn Roy (Shiv), only daughter to the fictional manipulative media titan Logan Roy, and Tom Wambsgans, executive kiss-up in the middle of the family’s media empire marry in season one, but not before a brief discussion about a prenup (I say brief because Tom essentially declared that he would sign anything Shiv asked him to because he is not about the money, even though he recognizes that she absolutely is). Tom, being from a Midwest family of modest means, finds himself in an uncomfortable relationship dynamic – his wife is in the power position financially simply because she is an heir to Logan Roy’s fortune.
Tom’s mother, a small-time lawyer from his native Minnesota calls the prenup “a little unconscionable” but Tom signs it regardless. It may be simply coincidence in the scope of the show, but using the word “unconscionable” to describe a prenup could actually provide a basis for having it thrown out entirely in the event of a divorce. If the enforcement of the prenup would leave one spouse impoverished or is in violation of state statutes, the judge could render the document partially or completely null and void. What is actually considered “unconscionable” differs depending on the state caselaw, and can even depend on the judge deciding the case – they draw their lines in different places based on varying sets of facts that make each divorce case unique.
A Tale of Two States
It’s likely that the comment Tom’s mother made about the prenup being “unconscionable” was actually in reference to the fact that infidelity was not addressed in the document. Shiv reassures Tom that they don’t need a clause addressing infidelity, but not for the reason you might think (or hope!) as you are about to tie the knot. Tom suggests that there won’t be any infidelity in the marriage, but Shiv responds with “Right, but if it does, we’re both grown-ups.” While a response like that would certainly not bring much comfort to a partner, it also speaks volumes about the intentions regarding money if the marriage were to break up. Depending on where the divorce case is heard, this might matter and it might not when considering a prenup.
As Tom and Shiv live in New York, the laws in that particular state dictate that infidelity are grounds for a divorce (New York includes both “fault” and “no-fault” reasons on their divorce filing applications). While the law has very specific definitions of infidelity, the burden of proof will fall on the spouse who is making the claim, and these things can often be very difficult to prove.
Even if you have proof, you won’t be able to use infidelity as a grounds for divorce to try to invalidate certain clauses of a prenup (the clauses that dictate the finances are the only ones we care about at this point) if you yourself have cheated; or if your spouse can prove that you knew about their cheating and de facto “accepted it” by not filing for divorce back then or separating from them; or doing something to cause the adultery, like paying someone to seduce your spouse (Ok let’s be honest, has anyone out there tried that? No? Didn’t think so, but sounds like a very sensational plot line for the show!).
It is interesting that as soon as they separated, Shiv is seen moving to Los Angeles while Tom stays in their New York City apartment. As discussed, New York will entertain “fault” and “no-fault” reasons for divorce, but the state of California will not. In California, all divorces are “no-fault” divorces, which means the terms of a prenup cannot be challenged on the basis of one partner’s infidelity.
Said a different way, California law does not punish the cheating party with less property or a bigger support order because of their affair. There are, however, rules about where a couple can file for divorce based on residency requirements, which spouse files for divorce first and in which state and where the children live. Because the marriage has been brief, and because Tom & Shiv do not have children (though the show may be setting up this potential storyline), it’s possible that her move to Los Angeles could be in preparation to file for divorce there and under their “no-fault” guidelines if it is later revealed that she did in fact cheat on Tom.
Get The Word Out
We see Tom on the offensive when he calls around to the top divorce attorneys in New York to discuss his case. There was some serious strategizing going on here – On the advice of Shiv’s own father Logan (who has been divorced himself), Tom was actually calling them so that he can rest assured that they won’t be able to represent Shiv. By calling first and providing his personal details and the facts of his potential divorce, he has now created a conflict of interest. This practice actually has a name – it’s called “conflicting out.” Seeking out a competent, high-profile attorney who is well versed in ultra-high net worth divorce cases is a must for Tom – but blocking Shiv from being able to hire any of those people would be a significant added bonus.
Conflicting out is an unscrupulous tactic that no ethical fiduciary would ever suggest to a client, but many people have spoken to their friends who have gone through ugly divorces and are aware of this underhanded trick. If you ever find yourself “conflicted out,” remember that there are many highly qualified divorce attorneys that can represent you and it is impossible for your soon to be ex to reach all of them before you do.
What We Don’t Know
There are many more questions about the stakes of Tom & Shiv’s divorce that the show has not provided a lot of insight into…not the least of which is Shiv’s now confirmed pregnancy and the unexpected death of Shiv’s father and Tom’s boss, Logan Roy. Prenups in all states can become much more difficult to enforce when there are children of the marriage, with custody and child support potentially raising the stakes.
Another interesting aspect of this pending divorce is the ownership and structure of the family business. Tom is a key figure within Waystar, and his divorce from Shiv and following Logan’s death in season 4’s third episode, his role going forward could be in serious question.
1. Did Logan have a buy/sell agreement with Tom when he came to work for the company? This agreement dictates how the business and its assets will be managed in case of a divorce between two key figures. The agreement might limit a spouse’s ability to acquire ownership in the company or deprive a divorcing spouse of voting rights within the company. Where does all of this leave Tom in terms of the company?
2. How is the company currently owned? Is the growth in the company looked at as a marital asset between Tom and Shiv? If Tom owns any part of it or if the company has grown significantly under his leadership, the case could be made that Shiv must pay him out on a portion of that company that she now owns with her siblings following Logan’s death. With Logan deceased, the company will pass to his heirs in whatever manner his estate planning documents mandate. We may find that his four children are not equal beneficiaries, or that he split the company in a way that his children did not expect and cannot work with.
3. Is there any life insurance? Life insurance on the key players at the company can pay off in a big way if liquidity is required to buy out certain members of the new ownership team.
Only Time Will Tell
As the twists and turns awaiting us each Sunday night continue to play out, many of the answers to these unknown questions will become known and make the path forward more clear for this cast of characters. Reality is often stranger than fiction however, and what we experience in our own lives while navigating divorce rarely has an easy conclusion that is reached in one “episode” or even in a single “season” of our lives. The complexity of life’s real issues are best unwound by a financial professional alongside an attorney of course. This is why I love what I do – I see something new every day and the opportunities to overcome these unique challenges are plentiful. The intricacies of personal relationships woven through their financial lives in the real world are unlike anything you’ve ever seen on TV. As the saying goes….Hollywood couldn’t make this stuff up.
This material by Coastal Bridge Advisors is for informational purposes only and is presented solely as an illustration of the typical advisor experience. Coastal Bridge Advisors does not provide tax or legal advice, and nothing contained in these materials should be taken as tax or legal advice. Unique client experiences and past performance do not guarantee future results.
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