Confidentiality Agreements & Divorce
When executives, entrepreneurs, and other high net worth or publically-known people divorce, their matters require more attention and experience than other divorce cases because of the added intricacies. One of those intricacies is the desire for as much privacy as possible — which often takes the form of a confidentiality agreement.
Read on for more about confidentiality agreements and divorce.
Business Records & Divorce
Many business owners prefer to keep business records and information confidential. In other cases, company policy or partnership agreements require them to do so. However, generally, divorcing spouses have the right to seek full and complete disclosure of any and all of their spouse’s relevant financial information. Business information — even when it’s sensitive or intended to remain confidential — can be relevant to many financial matters in a divorce, including property division, alimony, and even child support.
For example, your spouse may need to determine your income stream from a business in order to assess how to approach alimony and child support. Plus, ownership in a business constitutes an asset included in Connecticut property division. That means that the value of the owner’s business stake has to be determined.
Therefore, during the discovery process, expect that there may be document requests for business records, bookkeeper depositions, and/or an appraisal of the business conducted by a business valuation expert.
While you will always have a right to object to any specific requests for information in divorce litigation, the court may ultimately require you to produce sensitive information that you (and/or your business) would prefer to keep confidential.
How To Keep Sensitive Business Records Confidential During Divorce
While it’s very likely that your spouse will have access to your business records during a divorce, how do you keep them from being shared with others? There are three common ways:
- Confidentiality Agreements aka Non-Disclosure Agreements (NDAs)
- Collaborative Divorce or Mediation
- Reaching Agreements Outside of Court
Confidentiality Agreements aka Non-Disclosure Agreements (NDAs)
Confidentiality agreements or NDAs are contracts that established a confidential relationship between the spouse disclosing sensitive information and the spouse to whom the information is being disclosed. Confidentiality agreements typically preclude the requesting spouse from sharing the confidential information with any third parties other than attorneys, accountants, or other experts. Sometimes, the disclosing spouse also asks the court to seal the court record to keep information offered into evidence in court private.
Consider Collaborative Divorce and Mediation
One way to keep things private during divorce is to consider the alternative approaches to divorce — collaborative divorce and mediation. Collaborative divorce and mediation keep you out of court, which means limiting the information that becomes public down to the bare minimum. To learn more about the difference between litigation, collaborative divorce, and mediation check out Managing Attorney Meghan Freed’s webinar on “How to Choose Your Approach to Divorce.”
Reach Agreements Outside of Court to Keep Divorce Details Private
Even in litigated divorces, it’s possible and common to reach agreements outside of court on some or all of the issues in their divorce. This is a “low conflict” divorce as opposed to a “high conflict” divorce, or one in which almost all issues require the court’s intervention.
Here are some approaches to reach out of court settlements:
- Negotiation between divorce attorneys
- “Four Way Meetings” between spouses and their lawyers
- “Kitchen Table Conversations” between spouses themselves
Now that you have learned more about confidentiality agreements and divorce, you may want to check out our Divorce Information and Facts for answers on other topics.
Our first step at Freed Marcroft, the Goals & Planning Conference, is designed to get to the heart of your problem and unveil your true goals. Then, we take those goals along with the facts of your case and analyze them so that our divorce attorneys can present you with recommendations and options on how to move forward.