Gwyneth Paltrow, the actress who created the successful lifestyle brand Goop, said last summer that she and her new husband, Brad Falchuk, were living apart, on purpose. Although recently married, they had opted to maintain separate homes.

The practice, known as living apart together, dates at least to the 18th century, both among avant-garde artists bucking conformity and working people needing to sacrifice cohabitation for economic necessity.

In a recent interview in Harper’s Bazaar, Ms. Paltrow said they now live under the same roof. But the curiosity generated by her embrace of the practice gave lawyers and wealth advisers an opportunity to point to its risks. If a couple, wealthy or not, live in different legal jurisdictions, there can be a battle over which municipality’s or state’s laws prevail if they decide to divorce.

“The implications on a couple that is married and wants to dissolve the marriage, that’s where you’re seeing the ramifications of this,” said Michael Stutman, a founding partner of the law firm Stutman Stutman Lichtenstein & Felder. He has represented clients in a living apart together arrangement who filed papers in the county or state that would grant them more favorable treatment in a divorce.

Divorce is not the only area where choosing one state over another can make a huge financial difference. For certain financial transactions, people can benefit from a state’s favorable laws without even living there.

It has gotten to the point where some states have begun promoting their ability to offer better protection than their rivals.

The competition has also had a leveling effect; “state shopping” is no longer a tactic of the megarich. Merely affluent people looking for a better financial deal for current or future assets now have multiple, cost-effective options.

But not doing your due diligence can have unintended consequences. “State law makes a difference,” said Michael Roberts, president of Arden Trust Company in Atlanta. “If you have not planned, the state has a plan for you.”

Here are four areas where picking the right state matters as much as choosing the best financial plan.

When couples uncouple

When it comes to divorce, a couple with homes in two states, like California and New York, can face vastly different treatment of marital assets. California is a communal property state, where assets are split in half; New York is what is called an equitable distribution state, meaning there is more latitude in deciding who gets what.

Mr. Stutman recently represented a wealthy husband who was living and working in California while his wife lived in New York. When the marriage dissolved, Mr. Stutman said, he acted quickly to file the divorce papers in New York before the wife’s lawyer could file in California.

“It was a nine-figure pot of money, and the difference between the two states was eight figures,” he said. “It’s a bit of a race to the courthouse.”

The risk of living apart together exists for people in the same state but different counties. Mr. Stutman said a New York couple could file in any county in the state. Suffolk County, which encompasses the wealthy towns that make up the Hamptons, has traditionally been more favorable to the spouse who earned the money, particularly if the couple owned a home there.

Sometimes, the state will make decisions for a couple living apart together. In financial matters, for instance, most states will choose a sibling or a descendant over a partner living in a separate residence, Mr. Roberts said.

“If you’re living apart together and you want this person to be the beneficiary of your estate, then you need to have a will and spell this out,” he said. “If you don’t, it may end up with your brother that you can’t stand.”

Privacy vs. secrecy

States also have different views on being private and keeping secrets. Delaware allows for trusts to be set up so beneficiaries don’t know they exist until an age determined by the person creating the trust.

Other states require that beneficiaries be told of the trust on their 18th or 21st birthday. In Delaware, a person could be kept in the dark until 30 or 40 or later.

“Parents don’t want to tell someone at 18 that they have this multimillion-dollar trust if they can wait until their mid-20s or early 30s,” said Joshua S. Miller, senior wealth strategist and managing director at CIBC Private Wealth in Boston. “They want kids to get out of college, get a job, start working a bit, mature.”

Mr. Miller said he counseled clients not to let a trust be silent for too long. “A silent trust is a tool,” he said. “I feel strongly that values, legacy and stewardship are really important. I ask clients, ‘Are you able to talk openly about your wealth?’”

Cover your assets

Long ago, people went to foreign jurisdictions, like Switzerland or the Cayman Islands, to protect their wealth from creditors. But states have long since caught up, with Delaware, Nevada, New Hampshire and South Dakota revamping their trust laws to compete for high-net-worth individuals who want to shield their assets.

No state allows money to be shuffled into a trust in response to a lawsuit, a practice called fraudulent conveyance. But several states allow the transfer of money into a trust that would be protected after a period of, say, 18 months. A legitimate use could be by doctors or contactors who might be sued in the course of their career.

The money, though, cannot be commingled with other assets, said Matthew Hochstetler, a trusts and estates lawyer at David J. Simmons & Associates who practices in Ohio and Florida. And the process needs to look reasonable. He said he would advise clients to move no more than 50 percent of their wealth into an asset protection trust.

Bankruptcy judges do not look kindly on people who have separated assets for protection in a state like Nevada and cannot pay their debts in the state where they live.

“Bankruptcy judges love to put you in jail and hold you in contempt,” said Jerome M. Hesch, a retired law professor who runs a tax and estate planning institute at the University of Notre Dame.

But this is where the courts pit state against state. Generally, exceptions are made in the cases of alimony or child support, but states that allow self-settled trusts — in which the people setting them up are also the beneficiaries — have been challenged for not validating those support exceptions, particularly when the beneficiary lives in a different state.

“If you happen to live in a state with special asset-protection laws, there is nothing stopping you from taking advantage of your own state’s laws,” said Justin Miller, national wealth strategist at BNY Mellon (and no relation to Joshua Miller). “The real question, though, is whether individuals can set up a trust for themselves in a state where they don’t live and still avoid their own state’s law. Will your state respect it?”

Save on moving costs

Moving from a high-tax state to a one with low or no income tax is a well-known strategy. Of course, it requires the taxpayer to move. But there are other ways to save on income tax and still stay home.

Pulling certain assets out of high-income tax states like California and putting them into trusts in states with no income tax can save a huge amount of money. The highest rate in California is 13.3 percent; the rate in New York State and New York City combined can go up to 11 percent. Not paying that tax can be an enormous boost to an investor’s portfolio gains.

“All income reported by a Nevada or Delaware trust pays federal income taxes but no state income tax,” Mr. Hesch said. “If the people don’t need the money, it accumulates for the future.”

The only caveat is that the losing state does not always take the loss gracefully.

Original Article in The New York Times

This Valentine’s Day may have passed without much fanfare for many recently promoted, married women. According to recent research co-authored by Johanna Rickne, a professor at Stockholm University, women who received big promotions were more likely to get divorced. Dr. Rickne’s research examined men and women employed by private businesses with 100 employees or more and found that married women were twice as likely to divorce three years after a CEO-level promotion when compared to male colleagues.

Additionally, researchers examined three decades of worker records in the public sector and found women elected to public office were almost twice as likely to divorce following a successful election. Female physicians, members of law enforcement, and clergy who earned major promotions also followed the trend.

Researchers believe post-promotion tension and conflict could be to blame. When couples experience a radical shift in roles, it could cause problems. From a decrease in time spent together to a change in division of household tasks, promotions can introduce stress, especially where gender norms are involved.

“It is still seen as quite unusual for men to be the main supportive spouse in someone else’s career,” said Rickne in an interview last month with the BBC. She theorizes that husbands find the transition more difficult than their wives, and points out the labor market has traditionally lagged behind gender equality. And unfortunately, she says, “this norm changing is pretty far off.”

Things that come part and parcel with CEO status can put a strain on relationships as well. Long hours in the office, a high profile in the community, and constant travel might make it difficult for some couples to manage. Other times, husbands may become concerned about the perceived power balance in their relationship.

Charlotte Ljung, a 39-year-old Swedish CEO, maintains an online support group for people getting divorced. She told the BBC that Rickne’s research reflects experiences within her own life, and the network of women she’s met.

“Men today often find it intriguing in the beginning and want to be seen to support you and root for you — and I think that is a very positive thing — but I think a few steps down the line, when reality kicks in, it can be more difficult for men to deal with,” Ljung told the BBC.

Ljung told the BCC that the joke amongst successful women is: “The better you do at work, the more likely you are going to get a divorce.”

But luckily, women can decrease the chance of this occurring at the height of their career — they must simply choose the right partner. For centuries, American women have lived in a society where their best route to the top 1% is to marry rich, according to 2019 research published in the American Sociological Review. And because the gap hasn’t narrowed in over 20 years, we’ve taught women to find the most successful husband possible. But for high-status women, other prerequisites might be more optimal, such as seeking out a partner closer in age for a more egalitarian relationship.

This idea is supported by Rickne’s research, which found divorces following career boosts were most common in marriages where the wife was younger by a large margin and took a larger amount of maternity leave. Couples similar in age are actually much less likely to get divorced and enjoy a more egalitarian outlook on spousal roles. As a result, these couples were less likely to seek a divorce post-promotion.

Creating long-term goals and expectations is another good way to avoid potential marriage problems post-promotion. Men should discuss their own long-term career goals with their spouse and go over any issues with a marriage counselor. This can help couples troubleshoot common challenges that arise after women are promoted. Sometimes, simply being aware of these issues can save a marriage.

Other times, a relationship has legitimately failed and divorce becomes absolutely necessary. After all, according to a paper published by the University of British Columbia’s School of Social Work and Family Studies, divorce is more common in parts of the world with a higher degree of gender equality. Custody arrangements and shifting social norms have made divorce a more viable option for working women, and it is often for the best. While it can be a long, difficult process, in these cases divorce is often the only option for both parties to achieve happiness.

And if you do choose divorce, you should know you’re not alone. According to the American Psychological Association, about 40 to 50% of married couples in the United States divorce. The divorce rate for subsequent marriages is even higher.

Society has grown to become more accepting of divorce because it can indeed be a positive experience. Very few clients I’ve worked with ever regret getting a divorce, and the vast majority describe the experience as “liberating.”

Regardless, it’s good to have a plan for coping with the process. We recommend creating a daily schedule for yourself and sticking to it. This will help provide a sense of consistency that is key during stressful and uncertain times. We also recommend consulting with a licensed mental healthcare provider as soon as possible to explore your options. Keeping a level head during this highly emotional and personal time will help you get the best results out of your divorce.

Clients should also reach out to their attorneys for as much information on the process as possible. The more they know about the legal process, the less stressful it’s likely to be. Lawyers can also give advice on how to reach support communities, as well as ways to best proceed emotionally.

Know your options, and no matter what you decide, be sure to consult with a legal and mental health professional, practice self-care, and don’t look back.

Original Article in Business Insider

Because marriage is an ever-evolving experience, we constantly shift, change and, in some cases, start over. In It’s No Secret, couples share thoughts about commitment and tell us what they have learned, revealing their secret to making it work. (Answers are edited for context and space.)

Who Dana Stutman, 54, and Michael Stutman, 65.

Occupations Both are divorce lawyers. They are founding partners in the law firm Stutman Stutman Lichtenstein & Felder in New York.

Their Marriage 16 years, 4 months and counting.

Through the Years

The couple married Sept. 21, 2003 before 165 guests at the Essex House in New York. Mr. Stutman had broken his leg skimboarding in the Hamptons about six weeks before the wedding. He walked down the aisle with a cane.

The couple lives on the Lower East Side with their two children, Julian, 15, and Olivia, 11. Mr. Stutman also has two children from a previous marriage, Amelia, 27, and Henry, 23.

Dana Sherins, then 32, met Michael Stutman, then 44, in 1998 while on opposing sides of a divorce case. “He had the husband and I had the wife,” she said. “I was an associate and he was a partner at a different firm. He treated me with respect. As a young female I didn’t always get that from men.”

There was no chemistry initially, but they enjoyed working together. Six months after they met, a mutual friend invited them to the Grand Central Oyster Bar for a drink.

“Michael was getting divorced and I was becoming more comfortable with him,” she said. “When he found out I was single I saw him melt. He was looking at me in a very different way.”

Over the next four years a “When Harry Met Sally” kind of friendship developed. “But one night he put me in a cab at the end of the evening, kissed me on my forehead and called me when I got home,” she said. “I told him, you’re a wonderful guy. There’s more that’s going on and we should run with it.”

During summer 2002, they officially started dating, though she had some concerns. “I wanted children, he already had two; I didn’t know if he wanted more,” she said. “I called him and told him he needed to let me know if he did.”

Mr. Stutman took a week to think it over. When he phoned back he told her he did want to marry her and wanted a family and more children with Ms. Sherins. In February 2003 the couple were engaged in Hawaii during a family vacation.

What They’ve Learned

Ms. Stutman I’m a math person; he’s a language person. We think differently. I compartmentalize and plan ahead. He’s very much in the moment. He’s authoritative with kids. I’m the soft push over. We balance, learn from each other and enjoy intellectual conversation. We are constantly trying to improve ourselves.

Michael is brilliant, humble and has brought humor to our relationship and to my life. I’ve shown him how to be less harsh, and he’s taught me to be courageous enough to be who I am all the time. Which he is.

I’ve learned I’m a good mother. I never had maternal instincts, which I found. He reminded me I’m a capable and intelligent person, that was something I forgot. I built up armor. He and my children helped me to be vulnerable and take it off.

Marriage is a constant job that takes effort and energy, understanding and kindness, and forgiveness. Everyone has a different perspective. Both are usually right. If you leave disagreements unresolved they fester.

Being divorce lawyers has made us treat each other nicely. It makes us better parents and spouses. We’ve seen acts of unkindness projected onto a spouse, coupled by a failure to forgive, so it snowballs until they don’t have a marriage anymore. We’ve learned that the way you say something is important. We have hot tempers. Because we want this marriage to work, we work very hard at taking a breath before we say something and being forgiving. We’ve learned communication is the most important thing. Michael gets up first and wakes me up with a cup of coffee, then we sit on the couch for 10, 15 minutes. We didn’t realize how important and intimate it was to sit next to each other and talk about our anticipated day. It’s a reminder that we love each other.

Mr. Stutman Dana is a fierce team player. She’s the protector of our relationship and of our children. I can be the conciliator. I put a premium on keeping the peace; she’s more direct. We’re both sentimental, passionate and principled. Dana can be more impulsive. She can put herself in my shoes intuitively and readily. I don’t do that so well.

She’s taught me to lighten up, to be more of a free spirit and to look at the upside of things. I’ve really evolved over the last 15 years, she’s been a huge maturing influence.

I’ve learned I’m more of a caretaker than I thought I’d be, and to be giving without being resentful. Not everything is a quid pro quo.

In this marriage there’s a willingness and an insistence that our life is a life together, and everybody is meaningful and needs to be taken care of. With Dana I have an unquestionable level of support. We are loyal to each other. We try to be true reflectors. We are loving and gentle, but honest.

I’ve learned we need nuggets of interaction. If not, you can become a stranger and lose yourself and the connectivity with your spouse. You can’t forget how much the other person has to offer, and how much they need you to offer to them.

From work I’ve learned not to withhold affection or use sex as a weapon. To be respectful of each other’s soft points. People want to put a pin in something and say, “This is why we broke up.” But really, it’s about how you got to the place.

I’d be a mess if I hadn’t met her. I’d have no insight to myself. I have a wonderful place in the world with her.

Original Article in The New York Times