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Marriage is rightfully considered a facet of private life and intimacy. It is a space where we, ideally, feel safe, loved, and understood. Everyone, including wealthy couples, wants to keep marital affairs away from the public view.
When a marriage crumbles, private lives have the potential to become visible to the outside world. Wealthy spouses feel additional concern because their sensitive personal details and financial information are at risk of leaking out to the public.
A traditional litigated divorce can wreak havoc on the privacy of high-net-worth couples, exposing their personal and financial details and potentially damaging their reputations. Fortunately, there is a better way to deal with privacy and confidentiality concerns during an Illinois high net-worth divorce.
This article will explore high-net-worth divorce statistics, underscoring the undue publicity-related issues affluent couples face in divorce while pointing to collaborative law approach strategies to protect confidentiality and discretion during this challenging period.
Compared to several decades ago (between 1960 and 1990), divorce rates in the United States declined. In 2022, there were 2.3 divorces per 1000 couples.
Although wealthy couples divorce for approximately the same reasons as others, the amount earned per year can make a difference.
According to research, people making over $50,000 a year are 30% less likely to divorce than couples whose annual income does not exceed $25,000.
However, another bit of research suggests that financial problems are among the top reasons for divorce (37%). Whether one has a six-figure income or if one is struggling to survive until the next paycheck, financial problems can destroy a marriage. For low-income couples, financially related issues become a flashpoint due to the potential stress of being unable to meet everyday needs. Affluent couples, on the other hand, often disagree on where and how to invest money, and how to spend money which becomes equally burdening for their relationship.
Regardless of underlying reasons, the statistics reveal that about 1 in 5 divorces in America involve high-net-worth couples.
Like other divorces, high-net-worth marital property cases include emotional pain and anxiety. Wealthy couples and their children suffer as much as families with lower incomes.
But what sets affluent couples apart are complex assets that complicate property division, adding stress to an already heated process. The most typical assets that raise the stakes in high-net-worth divorce procedures and that attract public attention include the following:
Because of extraordinary wealth and atypical lifestyles, affluent couples must face public scrutiny besides legal and financial challenges. Going through litigation does not help. On the contrary, litigated high-net-worth divorce represents a unique opportunity for the media, business competitors, and other probing eyes to obtain information that could be kept private if a different approach to litigation is used to move through the divorce process.
As mentioned, everyone deserves privacy and discretion during times of crisis, such as divorce. But the stakes are higher for wealthy couples. High-net-worth divorces involve personal details as well as sensitive financial information.
Unlike lower-income clients, affluent couples have additional concerns regarding their family businesses, stock and bond investments, valuable collections, and multiple real estate investments. Due to the significant impact on other people, the public is interested in learning the details about divorce (including marital property distribution and other arrangements). For example, a high-profile case, such as the divorce between Bill and Melinda Gates, attracted global media attention. The Microsoft employees and the general public wanted to know how the case would play out and how the divorce might impact the tech industry as well as their everyday lives.
Knowing the unique concerns of wealthy couples seeking privacy during the divorce, collaborative law strategies offer central features that help high-net-worth spouses preserve discretion during the separation.
Unlike traditionally litigated divorce, the collaborative law process is confidential. As an out-of-court method, collaborative divorce does not involve court appearances, state-appointed judges, and a randomly selected jury to adjudicate the case. Wealthy clients work with their respective attorneys and a team of professionals who assist them in reaching mutually beneficial outcomes through evaluations and guided, polite negotiations. By signing a Participation Agreement, the spousal parties, their attorneys, and trained professionals (financial and child specialists) agree to keep all information shared during the sessions confidential. As a private process, collaborative process does not include public sessions. Reporters and the general public cannot attend the negotiations. No matter how much public attention a specific case generates, participants cannot disclose the details to any third party.
Collaborative divorce is a process that gathers multiple participants in the same room. Each party has an attorney who works shoulder-to-shoulder with their counterpart to produce positive outcomes. In addition to collaborative attorneys, the process involves a team of professionals (financial advisors, auditors, real estate appraisers, child specialists, etc.). The parties retain them to help untangle complex issues arising from the case and cope with inherent emotional and psychological challenges. Unlike litigation, where everyone in the courtroom can discuss the case details with the outside world, collaborative divorce is highly confidential. Collaborative attorneys must keep private all information their clients share with them. Likewise, the parties must not disclose information revealed during joint sessions. The same applies to professionals-participating in the process. In contrast to litigation, where findings of fact are integral to the divorce judgment, collaborative lawyers protect privacy by including only the minimum factual information in the settlement.
The collaborative divorce confidentiality extends to potential litigation. Parties are free to initiate the court process should the collaborative efforts fail, but none of the information shared during sessions is admissible as evidence in court. The exception is information about actions that constitute criminal offenses (such as child abuse and financial fraud) or violate collaborative professional rules of conduct. This aspect of collaborative confidentiality is vital in high-net-worth cases. Wealthy clients choose collaborative law because they care about privacy and discretion more than others. Knowing that collaborative law is not omnipotent in resolving all contested issues, they realize the potential litigation may ensue from unsuccessful negotiations. That is why affluent couples value rules that prevent using shared personal and financial information in court (during discovery, witness testimony, etc.).
Cooper Trachtenberg Law Group, LLC is a premier Illinois law firm practicing family law since 1988.
With more than 30 years of experience, our top-tier collaborative attorneys can handle the most complex high-net-worth divorce cases confidently and with ease.
We know your privacy matters to you, and we share your concerns. Harmed reputations, damage to family businesses, and devastating emotional pain – the main culprit is often undue publicity.
To help you proceed through a divorce with your personal and financial sphere intact, our experienced attorneys and team will go the extra mile to provide you with a collaborative law experience that suits your needs while protecting your privacy.
Please reach out to us today at 847-995-8800 to schedule your consultation.