In recent years, there’s been a fair amount of press coverage when it comes to the divorces of the rich and famous. We’re talking about some seriously high profile, and extremely high net worth, cases: Jeff Bezos and MacKenzie Scott, Bill and Melinda Gates are just two of the couples that spring to mind.
For us mere mortals, that level of wealth can feel very far removed from our day to day. And it renders the question: is divorce different for the very wealthy? Is the experience something else entirely, and are there additional factors to consider?
At Harrogate Family law, we’re no strangers to high asset cases and the world of complex financial remedies, and in this week’s blog we’re highlighting some of the ways the divorces of the very wealthy have their differences and their similarities.
It’s the same legal process
There’s no ‘special’ process for wealthy divorcing couples. Legally, in the UK, everyone has to go through the same steps on their particular journey.
One thing to note is that high profile divorces are often settled out of court. There are numerous reasons for this. Contingency plans and agreements may well have already been put in place in the event of a divorce, and let’s not forget that those in the public eye will be very conscious of the public interest in their private affairs. Settling out of court is one way to minimise and control the flow of information to the media.
This is a trend many UK couples are following, with various options available to couples who are keen to avoid costly litigation.
Needs may still be relevant
In high net worth cases, often both sides will have (more than) enough to live on after the financial settlement is arranged. However, in many cases the level of assets does not exceed the needs of both sides by reference to the lifestyle they are used to. In those circumstances, the needs of both sides will be a big factor in order to divide the assets fairly.
Here, the court has a lot of discretion to exercise (particularly in the UK). Who is the primary parent of any children? Click here to understand more about what “need” means. This is one of the ways in which a high asset divorce case is dealt with in the same way as any other. The difference, of course, is that the financially weaker of the two ex-spouses can still come out of the process exceptionally wealthy.
Covid-19 and its impact
The Covid-19 pandemic continues to have a major impact on couples across the world. Family solicitors have seen a massive increase in divorce enquiries, and high wealth couples are amongst those making them.
When it comes to being in lockdown and having lives turned upside down by a global event like this, all couples found themselves facing the same challenges: too much time together, a lack of personal space, concern for the health and welfare of themselves and loved ones. In light of this, many realised they were no longer well matched.
Complex finances
Whilst the reasons and practical process of a high net worth divorce case are similar, there are some additional considerations.
As a general rule, the wealthier the couple, the more complex the financial settlement will be. There may be multiple homes, plots of land, properties in different countries. There may be issues of jurisdiction, particularly where there are business interests at play. This is before we’ve even considered issues around the various tax implications.
Familial assets and gifts
The more assets there are, the more scope there is for disagreement around who they belong to. For example, if one spouse has received a large inheritance, or has been gifted property or other assets from their parents and relatives. There’s the potential for disputes about what constitutes matrimonial property to be more prevalent in cases where a lot of wealth, or a wealthy background, is at play.
We’re all human
Ultimately, the emotions experienced during a divorce are the same for any divorcing couple. Stress, upset, anxiety – we’re all human. Divorce is a big life change, and everyone needs to be supported by those around them and be guided by legal expertise and care.
At Harrogate Family Law, we have expertise in complex financial remedies and separations involving high net worth. So if you need us, get in touch and let’s see how we can help.