If you are contemplating a divorce and hold significant wealth, it can understandably raise concerns that go beyond simply ending a relationship. Together with the inevitable emotional strain that a divorce can bring, it is common to experience anxiety about wanting to protect wealth and maintain financial security, and to protect privacy and prevent reputational damage.
According to B P Collins’ family team, whilst there is no statutory definition for determining what constitutes a High Net Worth (HNW) divorce, these cases typically involve substantial assets, such as businesses, farming estates, trusts, complex income structures, property portfolios, and, in many cases, offshore assets. A portfolio of complex assets requires a carefully managed approach from the outset.
Financial exposure
The division of assets is going to form a central part of the divorce process. In HNW divorces, particular concerns often include;
- Loss of wealth: The future will inevitably look different for both parties once their finances are divided between them, and their standard of living is likely to drop. When parties are used to enjoying a particular level of wealth and have been in the enviable position of not having to worry much about money – if at all – suddenly facing a very difficult financial landscape can be both unsettling and frightening. The party that generated or brought the wealth into the marriage can also be worried by legacy concerns – for example wanted to preserve family farms or businesses for future generations.
- Hidden or undervalued assets: Particularly when trust has been broken during the marriage, it is common for people to fear that their spouse might try to undervalue their assets, conceal assets within complex structures or offshore holdings, or even attempt to put assets completely out of reach. In such cases it is vital to go through the process of obtaining full and frank financial disclosure at the earliest possible stage in order to gain the best possible understanding of the assets involved, and to trace as much as possible. This can be done with forensic assistance if needed and proportionate. When parties cannot agree on the value of an asset, a single joint expert can be appointed to determine the value – for example, a chartered surveyor can be appointed to value real property, and forensic accountants can be appointed to value businesses.
- Tax consequences: When considering the value of assets, the court considers what they are worth net of tax. As such specialist tax advice is often required to understand the true cost of liquidating an asset, and reliefs that might be applicable. Further, when considering the construction of a settlement proposal, tax advice is sometimes required in order to avoid or mitigate taxation consequences.
Instructing experts requires careful thought and positioning as part of the case strategy and so it is best to do so with the assistance and advice of a solicitor. We can also help source experts abroad to provide reports and advice as needed.
Business and control risks
It is common for business interests to form part of a HNW divorce. This will cause not only the divorcing spouse to feel concerned, but also any third parties and family who have interests in those businesses. These can include;
- Loss of control over companies: There might be concern about a forced sale of the divorcing spouse’s shares, dilution, or board disruption that damages business value and its reputation.
- Operational exposure: This could include disruption to management, key client relationships, or financing covenants.
- Legacy concerns: Succession plans for companies may be impacted.
It is best practice for shareholders in any company to have a clear shareholders agreement which covers what might happen in the case of a divorce. Not only should advice be obtained from a specialist family lawyer, but also from a corporate and commercial lawyer about what options there are for the business and its shareholders, in order to protect its operations and interests.
Privacy and reputation
HNW divorces being heard in the Family Courts can sometimes attract public interest. Since January 2025, journalists have been able to report from the Family Courts. The journalists must be accredited and they can speak to families about their case as well as report on what they see and hear in court. The families’ details must be kept anonymous. However, the Family Court does permit judgments in certain cases to be published and in some cases, the parties’ names will be published without anonymisation. This is considered on a case-by-case basis. As a result, there can often be concerns about;
- Public exposure: If the couple divorcing has significant wealth or are known to the general public in some capacity, this can create increased media interest, which can lead to scrutiny of finances or private life.
- Reputational harm: As part of any family court proceedings, allegations may be made which could affect the personal brand of the individual concerned, as well as their business relationships.
If parties are able to reach a settlement outside of court proceedings, or have their case determined in Arbitration (effectively private court proceedings) this removes the risk of public scrutiny entirely. We can advise on the most appropriate option of Non-Court Dispute Resolution on a case-by-case basis.
If however parties find themselves in court proceedings, then their legal team can work alongside PR and reputation management companies to protect the client’s personal or family brand as much as possible.
Family and children
The day-to-day arrangements for the family and the children will change as a result of a separation. This can create concerns including;
- Where the children shall live and divide their time: In HNW divorces, couples often live internationally, and it might be that one parent wishes to move back to their native country outside of the UK. It is also quite common for parents to have to readjust to less travel with their children, so that the other parent can enjoy holiday time with them too. We always advocate taking a child focused approach and seeking to agree parenting plans and arrangements for children which prioritise stable arrangements for children and protect the relationship with both parents where that is safe and appropriate. Hybrid mediation (i.e. solicitor supported mediation) in particular can be very effective in resolving issues between parents where they struggle to communicate with one another, or where one party is very difficult or abusive.
- Lifestyle disruption: This might include changes to schooling (especially where private school fees are made unaffordable by the divorce), changes to childcare and household staff, the sale of a family home, or the loss of some support networks. We work with parents to try and mitigate the changes for their children, but some are unavoidable. Parenting apps such as OurFamilyWizard can be invaluable in helping parents to communicate about these changes constructively and in the best interests of their children.
- Legacy concerns: Wills and trusts may become invalidated or need to be changed as a result of the divorce. Advice on trusts and wills should be obtained in tandem with seeking family law advice.
Emotional concerns
The emotional impact of a divorce cannot be underestimated. This can come as a result of stress, privacy invasion, financial uncertainty, and disruption to living arrangements. When people are not properly supported and are living in a continual state of fear, it can impair decision-making. This is particularly unwanted when negotiating a financial settlement.
As such, as well as having a trusted legal team, we recommend that our clients surround themselves with an emotional support team – whether that be trusted friends and family, and/or professional support in the form of a therapist, counsellor, or specialist divorce coach.
Understanding the complexities of a HNW divorce and preparing accordingly can assist in navigating the process more effectively. B P Collins has a multi-service team of family lawyers, corporate and commercial lawyers and trust and estate lawyers. In addition, we have a strong network of trusted advisors, including accountants, tax specialists and financial advisors who we regularly work alongside.
For further advice and information, please contact B P Collins’ family team at enquiries@bpcollins.co.uk or call 01753 889995.
