Robin Williams once joked that alimony is just a shortened form of “all the money” after two divorces on the part of the comedy legend cost him reportedly upwards of $30 million in alimony payouts to ex-wives Valerie Velardi and Marsha Garces.
Speculation since the actor’s death has even gone so far as to claim divorce and alimony woes pushed the actor to near bankruptcy and served as a contributing factor to his depressed mental state.
As one report puts it:
Robin Williams’ two messy divorces gave him plenty of material for bitter alimony jokes, but the state of his finances was no laughing matter. The comic shelled out $20 million to $30 million to ex-wives Valerie Velardi and Marsha Garces, according to reports.
Although Velardi signed a prenup, she scored at least $50,000 a month for life when they split in 1988, a Hollywood insider told The Post. Court records also show Williams paid Velardi more than $518,000 in 1989 from a profit-sharing plan administered by accounting firm Joel Faden and Co. of Manhattan.
While Williams’ net worth has been estimated at $130 million, TMZ reported that he plowed a sizeable chunk of his money into a 2009 trust for his three kids: Zachary, now 31, and half-siblings Zelda, 25, and Cody, 22.
Terms of the trust gave them each one-third of their shares when they turned 21, another third at 25 and the remainder at age 30.
Is there any truth to these rumors? All we can do is take a step back and look at Williams’s situation as a lesson in how to navigate alimony and divorce assets, no matter how much money may be at stake.
Let’s break down what’s being reported:
Alimony or Asset Division? In the reports of how much Williams paid out to his two ex-wives, there seems to be some confusion over alimony, which is money awarded (usually in monthly installments) to help the lesser earning spouse maintain the standard of lifestyle established during the marriage, and asset division, in which the marital assets acquired by both spouses during the marriage are divided.
It is noted that at least one of Williams’s wives had some sort of prenuptial agreement with the actor, but it is unknown what it covered, or even if it really existed. Since California is a community property law state, the vast sums of money that Williams allegedly handed over to his ex-wives could have come from the wealth Williams acquired during his decades-long run as one of the most successful actors in Hollywood. If unprotected through a prenup, it’s conceivable that each wife could have claimed 50 percent of whatever wealth he acquired during the years of each marriage.
Is it still a lot of money? Absolutely. But it’s also important to keep the facts straight as to why this money was given. It’s easier to make a joke about “all the money,” which may be why Williams publicly characterized his divorce payments as such.
Alimony & Bankruptcy: It’s also being floated that Williams was on the brink of bankruptcy due to alimony payments. If this were the case, it seems that his attorney would have given the actor counsel to file for a formal modification to alimony amounts. Requests to modify alimony (raising or lowering spousal support amounts) can be made by either party. The process is a stringent one, but it’s there to provide spouses with a drastic change in income an opportunity to have a judge take another look at their obligations. Changing alimony amounts is possible through out-of-court negotiation or mediation. There is no indication any of this happened.
Setting Up Trust Funds for the Kids: Here’s one money move, that if it’s true, was probably an excellent choice on the part of Robin Williams. As we explain in our estate planning article, setting up trusts for children can take this money out of individual’s control and place it in the name of the child, with parameters put in place as to when the child can access the money. By setting up a trust, this earmarked money is no longer considered a marital asset, and thus, no longer subject to asset division in a future divorce. Any parent with children considering getting remarried should at least find out more information about whether trusts are beneficial in their situation.
We will reiterate that what is being reported about Robin Williams and alimony issues is pure speculation. The untimely death of Robin Williams is tragic. He was a skilled actor who gave us the joy of laughter. His Mrs. Doubtfire movie has even been cited as helping children of divorce navigate their new family arrangements! Please, if you are struggling with depression, we encourage you to reach out for help. If legal issues related to divorce are what’s giving you emotional grief, we’re here for you.