I think she would give up something to keep it.
Kate has never really changed--her income has, but she's always been budget savvy (budget as in not spending more than you have--not necessarily frugalicious).
IMHO--she isn't the kind who is going to whip out the plastic to continue living a financial charade. It just isn't who she is.
I know people harp on her for her ridiculous antics with sales and coupons when they have all this money--to those I would say read "The Millionaire Next Door". Just b/c one gets money that makes them wealthy--doesn't mean they abandon those ways. It often helps them keep the money.
Sure she dresses nicer and such. And I'm pretty sure she's busting her entreprenurial butt to have something come out of this mess to continue an income--but the last thing she's going to do is let the ship sink so far while clenching her stilettos and nannies and not realizing the financial dire straits should it get to that point.
What has she spent all this money on? I have no idea.
But until it comes forward--none of us know.
I think financially--Kate and the children will be fine.
Jon on the other hand--I think is up the creek without a paddle. He has nothing truly marketable to regenerate that kind of income. In fact--I think that is to Michael Lohan's advantage.
Kate can write books (with or without a ghostwriter), write cookbooks (even if the recipes are unoriginal--recipes in and of themselves are not copyright protected--only their presentation in print), Kate can become a host of some sort. She's got something and with some savvy business people by her side, I have no doubt that she can generate an adequate incometo maintain the present lifestyle.
Just my thoughts--but they aren't financially sunk just yet.