Herjavec & Plese: When Does a Potential Spousal Support Recipient Have Enough Capital to Render Support Inappropriate?
Robert Herjavec and Diane Plese were married for thirty years before deciding to file for divorce in 2015. Herjavec, a multimillionaire tech mogul, is best known as a TV personality on Dragon’s Den and Shark Tank, two shows about aspiring entrepreneurs pitching their business ideas to wealthy investors. His annual income of approximately $5.2 million per annum is derived from the show, as well as his various business interests and investments. During the course of their marriage, Plese gave up her practice as an optometrist to care for their three children. She would leave the marriage with approximately $25 million to her name, which includes an equalization payment of $2.5 million. Despite this sizable capital, Plese was still claiming spousal support.
Justice Mesbur examined several factors to determine if Plese had a claim for either needs-based or compensatory spousal support. For example, the judge focused on the roles each party played during the marriage, as well as the lifestyle Plese enjoyed prior to the divorce. Plese had been out of the workforce for fifteen years in order to their children, and seemed unlikely to return. Based on these factors, she was deemed eligible for compensatory support. To maintain the lifestyle she enjoyed during the marriage, Plese testified that she expects to buy a house costing between $8-$10 million, as well as a cottage between $1-2 million. Though pricey, these properties are modest when compared to those of her husband.
The judge concluded – given the lifestyle the couple enjoyed over the course of their thirty-year marriage – that $10.5 million was a reasonable sum for the purchase of two properties. Based on expert evidence, the wife would have approximately $13.1 million left to invest after the aforementioned purchases, resulting in an income of $679,000 per year. This amounts to about $30,000 per month of investment income. However, in order to maintain the lifestyle to which she had become accustomed, it was determined that Plese would need $58,000 per month, rendering her eligible for needs-based support.
The Spousal Support Guidelines suggested that a range between $153,000 and $187,000 would be appropriate for this case. However, the judge diverged from this recommendation and awarded Plese $125,000 per month, which gives her approximately 39% of the New Disposable Income shared between the parties. One would think that with $25 million of personal net worth, the court would have found Plese adequately compensated for her role in the marriage. This case reveals that in family law, the terms “need” and “compensatory” are determined within the context of the parties’ lifestyles.
Prepare for the Next Chapter of Your Life
The outcome of a divorce case can influence various aspects of your life for years to come. The Ontario divorce lawyers at Feldstein Family Law Group P.C. have been serving the residents of Ontario since 1994. We understand that each client we represent has unique family dynamics and financial circumstances that need to be thoroughly and responsibly addressed. By evaluating your case and understanding your legal goals, we can develop a comprehensive case strategy that secures a beneficial outcome for you and your children.
Contact Feldstein Family Law Group P.C. at (905) 581-7222 to schedule a free in-office consultation.