Can UHNW clients keep giving charitably together if they divorce?

Can UHNW clients keep giving charitably together if they divorce?

“Not all couples, after they separate or divorce, are able to continue to work together. And philanthropy really is about having shared values and a shared vision, and a long-term strategic approach.

“Once MacKenzie Scott and Jeff Bezos divorced and the final details of how their assets were going to be divided was decided, she took a big chunk of her wealth and gave it away. That was something she did independently, but I think it reflects the fact that women tend to be more philanthropic, and maybe it was something that she felt she couldn’t do when she was married,” said Potocnik. “All of a sudden, some women may feel they have more financial freedom, after the divorce.”

BMO is seeing women take a more formal approach to their philanthropy, so they’re putting structures, such as donor-advised funds and private foundations, in place. “It says a lot about their willingness to create a legacy,” said Potocnik.

It’s a bit more complicated for couples who have private foundations, or the popular donor advised funds, which she said are less work than foundations and often administered by a third party. When the couple separates, the charitable assets remain in the foundation or fund, which are legal entities in their own right, and the money is not owned by either individual. Then, the question is whether the couple can still work collaboratively with shared values and vision to grant money to different charities. If they can’t, dividing either structure will also have to be negotiated in the separation.

Potocnik said advisors can help in these scenarios by ensuring that couples develop written agreements about what they’re going to do if they separate or divorce before they marry or set up the foundation or fund. If the advisors aren’t comfortable with it, they can ensure that the couple draws in others, such as a family or charity law lawyer.

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