Divorce Lessons Learned the Hard Way: The Headline-Making Multi-Billion Dollar Overdeck Case

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Divorce Lessons Learned the Hard Way: The Headline-Making Multi-Billion Dollar Overdeck Case

Laura Overdeck, the estranged wife of billionaire hedge fund manager John Overdeck, recently filed a lawsuit alleging that the Seward & Kissel law firm committed malpractice and fraud. She asserts that without her knowledge or consent, massive amounts of marital assets were moved into trust accounts that stipulated that if the couple divorced, she would no longer have any claim to those assets.

As the New York Times reported, she alleges that her husband and the couple’s lawyers moved billions of dollars of joint assets into trusts in 2018 to “shield them from her, their three children, and the Internal Revenue Service.” But she says she wasn’t made aware of those crucial details when she signed the powerful trust documents. The lawsuit is still being litigated in the New Jersey Superior Court, and the law firm denies any wrongdoing. But the entire prolonged dispute could have probably been avoided if the couple had simply utilized a prenuptial or postnuptial agreement. Unfortunately, they never created one.

The Extraordinary Value of a Prenup

The couple was married for two decades, and during that time, Mr. Overdeck – cited in 2022 as the richest man in New Jersey – accumulated most of his wealth, now estimated at $7 billion. Because most of that fortune was acquired while they were married, his wife was presumably entitled to a multi-billion dollar payout as part of their divorce settlement. A prenup would have been highly advisable, especially since Mr. Overdeck co-founded the super-profitable Two Sigma hedge fund about a year before marriage. Two Sigma subsequently grew into an approximately $60 billion enterprise. Even without a prenup, a postnup signed later in the marriage could have helped safeguard Laura Overdeck’s marital wealth. But prenups and postnups aren’t just useful tools for the wealthy. They can be beneficial regardless of your economic status. After all, money is the #1 thing that causes couples to argue – and those disputes frequently end in divorce.

How Prenups Work

Most assets obtained during marriage are considered to be shared by the couple, and are commonly referred to as the marital estate. For example, if a typical divorce settlement calls for dividing the marital estate 50/50, each spouse is entitled to half of those jointly owned assets. However, a prenuptial agreement specifies what particular assets are to be excluded from the marital estate before it is divided. For instance, prenups are helpful in spelling out who gets to keep what when a couple divorces, regarding assets such as businesses, financial investments, cars, boats, furniture, art, and even beloved pets. That’s one reason why the use of prenups has risen dramatically in recent years, as confirmed by a 2022 Harris Poll. That survey revealed that 40% of Americans support the use of prenups, and more than a third of unmarried people believe they’ll use one if they ever decide to marry.

What’s a Postnuptial Agreement?

A postnup is quite similar to a prenup. The main difference is that while a prenup is signed before marriage, a postnup is drawn up and signed after a couple is married. So, if you missed the window of opportunity to create a prenup, you can still gain similar benefits and protections through a postnup. That makes them particularly useful if a couple earns and accumulates substantial wealth and valuable assets during the course of their marriage. Forbes reported that the Overdeck couple did consider creating a postnuptial agreement in 2013, and went so far as to consult their family attorney about it. But they never followed through on that plan – even though their wealth ballooned during 20 years of marriage.

Retain an Attorney to Protect Your Own Interests

Another critical takeaway from the story of the Overdeck divorce is that whenever you are involved in legal matters, you need to ensure that your attorney specifically represents your best interests. Laura Overdeck apparently assumed that because she had previously worked with lawyers from Seward & Kissel, they were still representing her in 2018 − when she signed the trust documents that she alleges deprived her and her children of tremendous wealth. But according to Forbes, the law firm says that it has not represented her personally since 2010 – even though it was paid for services rendered on behalf of her husband from a joint account she shared with him before the divorce. Now, it is up to the courts to decide the truth of the matter.

Don’t Repeat the Same Mistakes

In retrospect, it’s evident that Laura Overdeck could have avoided lots of drama, legal expenses, financial problems, and worries by using a prenup or postnup and hiring her own designated legal counsel. The silver lining in this cautionary tale is that it’s possible to learn valuable life lessons from the mistakes others make – without having to suffer through the same mistakes yourself. The headline-grabbing Overdeck divorce certainly illustrates that fact. Before signing any legal document, consult a trusted and qualified attorney who has your best interest in mind. If you’re planning to get married, consider having one draw up a prenup – and if you’re already married, talk to your spouse about the mutual benefits of a postnup.

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Dror Bikel

Dror Bikel founded and leads Bikel Rosenthal & Schanfield, New York’s best known firm for high-conflict matrimonial disputes. A New York Superlawyer℠ and twice recognized (2020 and 2021) New York Divorce Trial Lawyer of the Year, Dror’s reputation as a fearsome advocate in difficult custody and divorce disputes has led him to deliver solid outcomes in some of New York’s most complex family law trials. Attorney Bikel is a frequent commentator on high profile divorces for national and international media outlets. His book The 1% Divorce - When Titans Clash was a 5-category Amazon bestseller.

To connect with Dror: 212.682.6222 or [hidden email] or online
To learn more about Bikel Rosenthal & Schanfield: bikellaw.com
To learn more about Dror's book The 1% Divorce: When Titans Clashsuttonhart.com

For media inquiries or speaking engagements: [hidden email]



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