An equal division of assets in divorce is a norm that can occasionally be departed from, for example if one party to a marriage has made a ‘stellar contribution’ to the marital wealth or the marriage is a brief and childless one. However, the Court has made it strikingly clear that such exceptions to the rule are wholly exceptional and in one judge’s words “are as rare as white leopards”.
In one such case, the Court of Appeal decided in a ‘big money’ case that the brevity of a childless marriage, during which the husband and wife largely kept their finances separate, justified a departure from an equal division of the assets.
The primary source of the couple’s wealth was £10.5 million in bonuses that the commodities trader wife had earned in just five years. Her rewards had enabled them to lead a lavish lifestyle and, towards the end of the marriage, the husband had taken redundancy and devoted himself to refurbishing their two homes.
The marriage lasted only four years, foundering after the wife discovered that the husband was having an affair. The assets that stood to be divided in their divorce were worth £5.45 million and a judge decided that the husband should have half of that.
In allowing the wife’s appeal, the Court found that a departure from the equal sharing principle was justified. Effectively all of the marital assets had been generated by the wife. The couple had no children during a short marriage and there had been little inter-mingling of their wealth. The Court found that the husband was entitled to £2 million, made up of a £1.1 million house and a £900,000 capital sum.
The principles applied in this case will not always fit and therefore the question remains, how does one protect one’s assets in the event of divorce? Effective protection can come from preparing well thought out and well drafted trust documents before marrying. Alongside trusts, another effective form of asset protection is a pre-nuptial agreement. These have, over recent years, become increasingly popular with couples who have assets owned prior to marriage that they wish to protect in the event of divorce.
For advice on protecting your financial interests in the event of relationship breakdown, contact Mauro Vinti on 0121 746 3300 m.vinti@sydneymitchell.co.uk
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