Archive for October, 2018

High Net Worth Divorces Put a Lot at Stake

Posted by Leah Upton, CFP®, CRC®, CDFA®

How to Choose the Best Way to Approach Your Divorce

Ending a marriage can be a difficult decision–in part because of the emotions involved coupled with the decisions and potential concessions that may now need to be made. Depending on the nature of your separation, these decisions can be quite contentious– and perhaps even more elevated when high levels of wealth are involved.

The Importance of Approaching Your Divorce with a Clear Head

For a multitude of reasons, divorcing couples often want to rush the divorce through by immediately hiring divorce litigation attorneys. However, it’s most important to first ensure you’re approaching the situation with a level head. Evaluating and processing the situation will help you make sound decisions around the divorce proceedings, ultimately helping to keep your assets, interests and legacy properly protected.

Approaching the situation with a clear head will also better enable you to choose the best option through which to execute your divorce. For high net worth couples, there can be a lot at stake, and handling the proceedings in the way that is best for you and your family can mean the difference between a satisfactory conclusion that all parties agree with, or one steeped in resentment that can affect a wealthy spouse far past the time of divorce.


If you and your spouse choose to hire litigation attorneys, you would each obtain separate counsel to represent you in court. This option may make the most sense for a high wealth couple since each individual has so much at stake, and these big matters–such as child custody, spousal support, division of wealth and assets, retirement accounts or business ownership–simply cannot be settled without outside counsel.

However, there are some drawbacks to litigating a divorce. In addition to being expensive, this process is time consuming, impersonal, and will become public record as it plays out in court with document submissions and expert and witness testimonies. Ultimately, the judge will decide the outcome of child custody, child support, division of marital property and spousal support.

While it is helpful to have these big decisions handed down from a judge, you should keep in mind that this process is lengthy and expensive. Depending on how long it takes to litigate your divorce, it can be a significant drain on even the wealthiest couples’ assets.


Not all divorces are contentious. Many couples are able to separate on good terms and choose to discuss large matters like child custody and the division of their wealth without hashing it out in court. In this type of situation, mediation is a good option to consider.

Mediation allows you to meet with a neutral third party throughout a handful of sessions to focus on a resolution and agree on a settlement together. Mediation is the shortest and most cost-effective method of dissolving a marriage, and could be a consideration if you and your partner are dissolving the marriage on agreeable terms.

Collaborative Divorce

To preserve your marital estate and maximize assets for you and potentially the next generation after your divorce, a good option to consider is a collaborative divorce. This option lies between litigation and mediation as it allows you and your spouse to diplomatically negotiate the terms of your divorce, even if you have a highly-complex marital estate.

In a collaborative divorce, you and your spouse hire your own attorneys and work together throughout a series of meetings with the goal of negotiating the terms of the divorce in a diplomatic and discrete way.  Your attorneys will likely still solicit the help of a neutral third-party mediator, in addition to party-neutral professionals such as child custody specialists, financial professionals, business valuators, and mental health experts.

Once you and your spouse have agreed on a settlement, it is simply filed with the court.

There is some risk with a collaborative divorce–if the settlement cannot be agreed upon, the parties must both hire different attorneys to represent them in court and the outcome will be in the hands of the judge.

Ultimately, you need to choose the approach to your divorce proceedings that works best for your situation. However, regardless of what you choose, make sure you have trusted professionals and advisors on your side to help you avoid missteps or long-term financial pitfalls. While it may be tempting to rush through divorce proceedings whatever the cost, your advisor can help you think about your future financial situation versus the immediate settlement terms, so you can make the best decisions that will have positive lasting effects.

The Importance of Financial Literacy for the Next Generation

Posted by Jeremy Walla

A critical part of wealth planning is involving the next generation

Shirtsleeves to shirtsleeves in three generations–or so the saying goes. Believe it or not though, there’s actually truth to substantiate the claim.

Almost 70% of second generation families have exhausted the accumulated wealth of their parents, and nearly all families have squandered the wealth by the time it gets through the third generation.

Significant wealth brings with it amazing capability and flexibility: the freedom to live a comfortable life, to provide limitless educational opportunities for your children, and to enjoy the moments and experiences in life that you cherish most (hobbies, travel, etc.). However, over time, no amount of money is endless if spending is left unchecked. Vacation homes, luxury cars; they all add up. With luck, a good estate attorney and financial advisor will help you manage your lifestyle to a reasonable level. As you can imagine, “reasonable” is deliberately vague, but should be interpreted to mean that you will still have substantial assets to pass on to your children, grandchildren, or other relatives.

Through the estate planning process, you and your advisors may come up with a fantastic plan to transition assets in a number of ways, but all of that planning goes to waste if your children have no understanding of what they’re receiving. They’ve enjoyed the advantages of a generous upbringing, and in most cases, they’d like to keep up that very same lifestyle indefinitely. Perhaps it’s possible for this to happen, but only if they work through the same level of planning that you completed, and the earlier they do this, the better. The plan will inevitably change, but the logic and the building blocks remain the same. To be successful, the second generation needs to have a firm handle on the basics of personal finance, an area that often gets overlooked when money is no object.

You started out from the bottom and worked your way up, eventually reaching a point where financial decisions became easy. Remember, you have flexibility and capability. The second generation knows they have flexibility, but do they have the capability?

The questions are endless, but the answers are critical to success.


Communication is Key When it Comes to Next Generation Wealth Management

In a recent post, we explained that a little education goes a long way. Conversations around money have always been awkward, no matter the level of wealth. For the ultra-wealthy, their reasoning for hiding inheritance figures from their children is often two-fold. They feel that divulging the information would be inappropriate, or would alter the behavior of their child(ren) (for the worse), and they often don’t even know how to go about addressing the topic. The tough part is, ignorance is bliss, and leaving children out of the conversation could set them up to “win the lottery” when the inheritance is passed on to them. Bear in mind, we all know how lottery winners tend to spend their money!

Remember, start with the basics, as these are the areas that will help limit risks for your children when it comes to the transfer of wealth.

While generational wealth can be a blessing, it can also be a curse. Diligence and education are your best bet at maintaining the status quo, or improving chances of greater success over the long term. History has shown us families who did it well, but the list of those who made and lost fortunes is far longer. Regardless of your level of wealth, the livelihood and financial future of your children depends on their capabilities. Some have more flexibility than others, but those who are more capable have the greatest advantage.