For wealthy and high-profile clients, privacy can be hard to attain. But most people don’t want their personal lives made public, especially when they are going through a divorce.
High-net-worth clients looking to keep their divorce proceedings out of the public eye have options, says Michelle Smith, who herself is a divorce planning specialist, a member of the Institute for Divorce Financial Analysts and the founder and president of Smith Divorce Strategies in New York. Smith urges divorcing clients to turn to a divorce financial planner before they go to the lawyers.
“Unfortunately the dynamic for people with a lot of money is to automatically go to the litigation,” Smith says. She warns that even if a divorce doesn’t go to trial, once these wealthy individuals decide on litigation, court dates for the proceeding are made public. “All of a sudden you’re divorce is on page six.”
Here are two ways to keep your wealthy client's divorce a private affair:
Under this process, both members of the couple seeking a divorce sign an agreement to keep the proceedings out of the public space. “It gives a little extra teeth to keeping it out of a courtroom,” says Justin Reckers, a divorce specialist and the director of financial planning at Pacific Wealth Management in San Diego.
The signed agreement states that if either of the parties so much as threatens to take the divorce to court, the two lawyers already involved in the case are not permitted to participate in the litigation, Smith explains. This means that the divorce will likely take longer and cost more because the process starts over.
The collaborative process allows a divorce financial specialist to work with the two attorneys to create a settlement that will be appealing to both parties, Smith says.
This is in lieu of a formal discovery process, says Reckers. The divorce planning specialist will examine the financial situation -- beyond simply splitting assets down the middle -- but he or she will also keep the details of those assets out of the public eye.
This process is similar to a collaborative divorce except there is no signed agreement to keep the divorce from going to trial. Under the mediation process, a divorce financial specialist works with both attorneys as a neutral party to create a settlement.
Recently, new mediation clients who had spent 18-months in the traditional litigation process and were not getting anywhere came into Smith’s office. “They’re stuck on one very big real estate issue,” she says. “Maybe I’ll be able to dislodge something.”
Smith explains that she appeals to HNW clients not just because of privacy. With these alternative methods, she can often help settle divorces faster than the court system and with a better financial agreement for her client.
Although, she says, it doesn’t hurt that when clients sit down in her conference room, she assures them that the details of their divorce will be kept private.