A seismic shift in divorce financials – how could future assets be shared following a Supreme Court decision?
The Supreme Court upheld a Court of Appeal decision where the Husband argued his ex-Wife had unfairly been awarded £45 million and ultimately reduced the Wife’s financial claim to £25 million. The husband had substantial wealth prior to the marriage and had transferred assets worth £80m to his Wife with the intention to place them in trust to reduce future liability to inheritance tax. The assets were not regarded as matrimonial property (the transfer was made solely for tax planning purposes) and non-matrimonial property is not subject to the sharing principle.
What this means
Those who are divorcing can have greater confidence that assets acquired prior to marriage stand a greater chance of being protected.
What are non-matrimonial assets?
Non-matrimonial assets can include inherited land, inherited money, or capital assets acquired prior to marriage. These assets must be clearly separate and never treated as shared. Evidence must be shown that these assets have never mingled into the matrimonial pot. It is vital to note that the courts will prioritise the financial needs of both individuals and any children before considering any unequal division.
How this changes future divorce
Those who are divorcing can have greater chance of successfully arguing that assets acquired before they married do not have to be shared.
In this case, the husband’s significant legal costs would have been covered by the significant award in his favour. However, typically people do not have the financial means to fight a case to a higher court.
The most sensible solution from Emsleys to avoid high-court battles, would be to try to avoid this situation arising. The answer is to consider the preparation of a nuptial agreement which will clearly set out assets owned by each party and what would happen upon a marital breakdown. These agreements can be made in advance of marriage (pre-nuptial) and can also be agreed during the marriage (post-nuptial). But these agreements can be challenged, for example, because of lack of legal advice; inadequate disclosure; duress; or failure to meet the applicant’s needs. All making the need for expert legal advice from an experienced solicitor imperative.
How Emsleys can help
Divorce and financials can be complicated, especially when significant assets are involved. There are specific rules which dictate how assets are to be shared following separation and instructing a recommended solicitor is the best way to protect your financial position and minimise conflict arising during any marital breakdown.
Our expert family team can provide you with the necessary advice to protect your assets and minimise conflict arising during any marital breakdown. From advising on the initial separation to the division of finances, our Family Law lawyers are here to help.
