The Biggest Mistake Women Make With Alimony

Will Camille Grammer save her fortune and use it well or will we be shaking our heads a few years from now wondering how she could have lost all that money when so few ever get those opportunities?
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It kind of boggles the mind that Camille Grammer, the soon to be ex-wife of Kelsey Grammer--the prolific and talented actor in such hits as Cheers and Frasier--can wave her manicured hand dismissively at a reported $40 million payout and say she wants more for the 14 years she was married to him.

How many other divorcing women wish they could be in that position?

For many women who sacrificed careers to take care of the children, or as I call it, be the President of Domestic Affairs, alimony--a.k.a. spousal support (the terms are used interchangeably)--is rarely allotted in such abundance. In fact, unlike in other eras where laws were established to keep marriages together by penalizing spouses for leaving with a lifetime maintenance obligation, alimony has been trending as a temporary payment to help the non-working spouse create or rebuild a career.

"In general, now spouses are getting approximately one year of maintenance for every two years of marriage," says Marguerite Royer, a noted divorce lawyer at Moses & Singer in New York City.

The maintenance is determined by the lifestyle the couple led prior to the divorce.This is why we hear of padded monthly costs that include thousands for pet grooming, gifts and bikini waxes as the lower-earning spouse tries to justify why he or she should be given financial support. For women like Camille Grammer, that can be a large payment and since Kelsey wants to remarry, she may get as much as $50 million.

I joked to a girlfriend that while I feel bad for Camille that Kelsey left her for another woman and how painful it must be to see him and his younger, newer girlfriend coo about their pending marriage, $50 million certainly can cushion the blow. It is enough to rebuild careers, start a business and if necessary go back to school for a professional degree.

Yet several famous ex-wives lately have gone through fortunes that few ever receive.

Nicole Murphy, ex-wife of Eddie Murphy, spent her $15 million alimony package in just four years, and also landed herself in debt with five tax liens totaling $846,630.

Patricia Kluge--a former belly dancer who married billionaire John Kluge, a guy 35 years older than she--is now belly-up in debt despite a reported billion dollar settlement.

And then there's Diandra Douglas, who received a whopping $45 million after her divorce in 2000 from Michael Douglas, and then went after the cancer-stricken actor for profits from Wall Street 2: Money Never Sleeps, claiming it was a spin-off vs. a sequel, and she is therefore entitled to profits. As New York divorce attorney Raoul Felder said, she's an "example of greed gone wild and irrational."

What happened? How can you squander that much money? What were they thinking? Many divorce attorneys I spoke to say that many ex-spouses fall into the trap of thinking that their lifestyle will not permanently change--should not change--after a divorce.

The problem, says Royer, is that many of these spouses--especially women--fail to handle finances well: "They are so used to having others pay their bills and take care of their lives that they think some new person will swoop in and resume where the ex-husband left off," she says. "They never paid attention to what everything costs."

"It really comes down to entitlement," adds Royer. "They don't plan for the future and realize that this sum must last forever. They have to live on a percentage of what used to be an annual salary."

Entitlement is really a word worth contemplating.

I can't tell you how many women I counsel in my capacity as a divorce coach use alimony as a paycheck instead of an investment into their future. They often act like gamblers at a casino wheel collecting winnings while the roulette wheel is still spinning for another twenty years. Instead of rolling the dice on meeting someone else, which is what many are betting on, better to take a course on managing finances and learn about interest rates, bank loans and jobs that potentially pay well.

Other times, some divorcing spouses insist on keeping the house along with the housekeepers and gardeners, even though the upkeep of these grand homes sucks finances like a giant vacuum cleaner. Better to sell the houses and downsize to another town so you can build a nest egg and develop your own job skills for the future.

I'm not sure if I feel sympathy or revulsion that these naive women went through these vast sums of money when so many ex-wives-are struggling with meager amounts to live on following a divorce and have to choose to eat rice instead of roast beef while they are raising children without the help of a parade of nannies.

Of course, men now get alimony too, though I have yet to hear of Jennifer Lopez' ex Chris Judd running through his millions or Tom Arnold squandering the $50 million he got from Roseanne Barr. Even Britney Spears' ex, K-Fed isn't crying poverty. Maybe they know how lucky they are to have been given such a windfall to rebuild their lives.

There is no doubt that there have been abuses with alimony. Why should someone pay alimony if his or her ex is living for years with someone else? Or if both divorcing spouses are making around the same money, because the woman has residential custody, should she get more?

As the Wall Street Journal reported, lawmakers in Pennsylvania, New Jersey and Oklahoma are pushing to correct abuses by putting time limits on alimony payments. The Wall Street Journal's Jennifer Levitz also reported that lobbyists and activists are pressing for similar rules in Ohio, Florida, Arizona, Georgia and North Carolina.

Alimony, I believe, is still an important part of the law since many parents make sacrifices in the marriage for the greater good of their families and should be rewarded, and more importantly, protected. But as educators on divorce, those in my profession need to remind divorcing couples that alimony should be used as an investment. No matter what your standard of living once was, it will change unless you are the financial rainmaker.

So what do you think? Will Camille Grammer save her fortune and use it well or will we be shaking our heads a few years from now wondering how she could have lost all that money when so few ever get those opportunities?

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