High Net Worth Family Law

There are two main ways finances can be divided during divorce:

• Negotiated divorce settlement – where the two spouses agree how to divide their assets, often using methods such as family mediation and collaborative law.
• Court proceedings – where one or both spouses apply to a family court to decide how their assets should be split.

Negotiating a divorce settlement voluntarily will usually be faster, less costly and less stressful, as well as keeping your financial affairs private. However, court proceedings are sometimes necessary, such as where a settlement cannot be agreed, the relationship between the spouses is particularly hostile or where there has been domestic abuse.

Factors that should be considered when negotiating a divorce financial settlement and that will be referred to by a court if a Financial Order is required are:

• The financial contribution each party made to the marriage
• Each spouse’s income and earning capacity
• Other contributions made by either party e.g. raising children
• The length of the marriage
• The needs of each spouse and any children or other dependants

Business assets are treated the same as any other assets, meaning they will be considered as part of any divorce settlement or court-ordered division of assets. However, courts do generally recognise that it is desirable to avoid any negative impact on the value of business assets in divorce and separation, so this will normally be taken into account.

Whether you are negotiating a divorce settlement privately or an application has been made to a family court for a Financial Order, a common approach would be to offset the value of business assets against other assets, such as your family home and savings. This can allow a fair division of finances to be achieved while preserving the integrity of business assets.

Pensions are considered matrimonial assets and will need to be considered as part of the division of finances during divorce or civil partnership dissolution.

There are three basic approaches that are usually taken when dealing with pensions during divorce, which are:

Pension offsetting – where one spouse surrenders their interest in the other spouse’s pension in exchange for a larger share of other matrimonial assets.

Pension sharing – where a percentage of one spouse’s pension pot is placed into a separate pension scheme for the benefit of the other spouse, giving each spouse their own individual pension.

Pension earmarking – a rarely used option where it is agreed that a certain percentage of one spouse’s pension will be paid to the other on an ongoing basis.

Inherited wealth and assets will normally be considered part of the matrimonial assets for the purposes of a divorce settlement or court-ordered division of finances. However, this will depend on various circumstances.

If inherited assets are only received a short time before a marriage breaks down, it is possible a court would consider that they should not be included in the matrimonial assets. Conversely, there have been instances where a substantial inheritance is expected to be received in the near future where courts have decided that this should be included.

Ultimately, it will depend on the circumstances and the needs of the parties, as well as what can be agreed or what a court deems fair.

Where one of the parties to a divorce has a beneficial interest in a trust, then this may be considered as part of the marital assets. Exactly how this will apply in any given circumstances can be very complex to determine, so, if this is a concern, you should seek specialist legal advice at the earliest opportunity.

Yes, all assets held by both parties must be declared, including international assets. If either spouse is caught attempting to hide assets, then a court may penalise them by making them cover the other spouse’s costs and/or ordering a more favourable settlement to the other spouse.