Confidentiality and privacy have long been concerns for divorcing spouses in the United States. Divorce itself has a negative stigma attached to it, regardless of how “normalized” this process has become in recent decades. No one wants to “air their dirty laundry” in public, especially if the details of the marriage are embarrassing or shocking. Unfortunately, this is often exactly what happens when couples go to trial during the divorce process.
While instances of infidelity, domestic violence, and criminal activities can all be shameful tidbits of information that couples want to keep private in a divorce, there is also another important detail associated with confidentiality. We are talking, of course, about financial matters. Many high-net-worth individuals do not feel comfortable with the entire world learning about the extent of their fortune. In contrast, someone in dire financial straits probably does not want the details of their bankruptcies and failed businesses made public. In both instances, these details could damage the reputations of innocent spouses. So what can be done to protect financial confidentiality during a divorce?
Avoid a Trial
The easiest and most obvious solution is to simply avoid going to trial in the first place. When couples create separation agreements, financial details never need to be discussed in a public court. The judge simply signs off on the agreement and issues a judgment of divorce. These financial details are not mentioned because both spouses agree on how the financial aspects of their divorce will be handled before they even go to court. Another very similar option is divorce mediation or collaboration.
Of course, it is not always that simple. Many spouses are unable to agree upon certain aspects of their divorce, especially details related to financial matters. If one spouse feels like they are getting the short end of the stick, they might have no choice but to go to trial, even if they desperately want to avoid making their finances available to the public.
With all that said, this is often exactly the reason why high-net-worth spouses are pressured or “bullied” into signing separation agreements with which they are not completely comfortable. These individuals are so concerned about their financial confidentiality that they are willing to accept a relatively bad deal, as long as the public does not find out what is really going on with their businesses or fortunes.
Even if a spouse is forced to go to trial, they can still protect their privacy with a confidentiality agreement. A confidentiality agreement (also known as a NDA) is similar to a separation agreement in that it is a separate legal document signed by both spouses outside of court. This confidentiality agreement makes financial information more confidential in a trial, and it often stipulates that no one involved in the court process can discuss the details with anyone except those directly involved with the divorce. In addition, the financial details of a divorce may be sealed after the trial is complete, and relevant documents may be destroyed.
However, spouses willing to “force” their exes to go to court are unlikely to sign these documents, especially if the whole purpose of their decision is to expose and publicly humiliate their former partner. Sometimes, the best option is to simply have an attorney black out your social security number on financial documents and hope for the best.