Issues around high net worth divorce

As the longest-standing specialist family law firm in Mid-Sussex, Tisshaws have a proven reputation for representing clients in high net worth divorces.

In all divorce cases, the court will try to ensure that both parties’ needs can be met from the financial settlement arising from their divorce.  In high net worth divorce cases, however, where the standard of living has been high and there are considerably more financial resources available to the parties, their needs will be considered more generously.

The assets that feature in high net worth divorce cases can be extensive and complex.  Examples can include the following:

• Businesses
• Trusts – both onshore and offshore
• Properties
• Pensions

Businesses

Any interest held by one or both parties in a business will need to be disclosed in high net worth divorce cases.

Generally, if one party has a major interest in a business, they may wish to retain it as part of a financial settlement in a divorce.  Where the business is an income-producing asset, or where staff are employed by the business, the court will be open to considering options that allow the business to remain intact.  These may include the other party to the marriage receiving a larger share of the other assets available, for example cash, property or pensions and / or spousal maintenance for a certain term.

Trusts

Trust assets can be considered as a financial resource to one party in a high net worth divorce case. As part of financial disclosure obligations, the trustees will be asked to release documentation pertaining to the trust.  This may be relatively straightforward where the trust is based in the UK, but in respect of offshore trusts, it can become complicated.  Where there is resistance from the trustees, an application can be made to court for financial disclosure.

Properties

In high net worth divorce cases, there tends to be more than one property involved, often based both in the UK and abroad.

Further complicating factors can arise if part of couple’s property portfolio includes managed rental properties, if one or more properties were acquired prior to the marriage, or if one party made a greater financial contribution to the purchase price.

Pensions

The most common orders that can be made in relation to pensions in a high net worth divorce case involve pension offsetting, pension sharing and pension attachment orders.

Offsetting is where one party’s claim against the other’s pension is offset by receiving other assets available, for example cash or an increased share of the equity in the family home.

A pension sharing order is where the court can order the transfer of a part or all of one party’s pension or pensions to the other party. While a pension attachment order is where the court redirects part or all of one party’s pension benefits to the other party once the pension comes into payment.

Where the value of the parties’ combined pension assets exceeds £100,000 and / or includes defined benefits pensions, it has been recommended by the Pension Advisory Group that a Pension on Divorce Expert (PODE) ought to be instructed by the parties to provide advice on the best options available as to dividing pensions.

Issues of non-disclosure

It is not uncommon in cases where there are significant assets for one party to withhold from providing full and frank disclosure of their finances to the other party.  This is with a view to limiting the other party’s financial claims arising from their divorce.

A number of orders can be applied for to prevent this party from succeeding in their attempts to misrepresent the scale and value of their assets.  Examples include freezing orders, which prevent a party from disposing of an asset, to issuing committal proceedings where the non-disclosing party can be committed to prison.

In addition, and where it is difficult to quantify the scale of the non-disclosure of assets, a court can be asked to draw adverse inferences against the non-disclosing party.

Non-matrimonial property

In high net worth divorce cases where property and assets may have been acquired prior to the marriage or after separation, they may be classed as ‘non-matrimonial’ in nature.  Generally, the court will look to exclude non-matrimonial property from being shared unless the financial needs of the other party and any children of the family cannot be met from the remaining matrimonial property.  In such cases, the needs of the family will generally trump any arguments as to ring-fencing non-matrimonial assets from being shared.

How we can help

At Tisshaws, we pride ourselves on taking a commercial and pragmatic approach to resolving the issues in dispute in high net worth divorce cases.  With a team of mediators and collaborative lawyers, Tisshaws recognise the benefits of alternative forms of dispute resolution, and we consider the merits of these with you.  In the event, however, that court proceedings are deemed necessary, our experience in complex litigation and connections with other experts that can assist with high net worth divorces will come to the fore.

Tisshaws Solicitors are ranked in the Legal 500 top 500 UK to law firms.  We offer an initial no obligation consultation for up to one hour for £50.00 (incl. VAT) where you can receive advice specific to your personal circumstances.  To book an initial meeting with one of our lawyers, please contact us on 01444 472700, email [email protected] or complete the form below