To Share or Not to Share
Family Lawyers must keep up with developments in their discipline as much as everyone must keep up with the British weather.
Of late, there have been two separate judgments in both the Supreme Court and the High Court relating specifically to matrimonial financial remedy within divorce proceedings, involving eye watering sums of money.
The outcomes of these cases have a message to send to any of us in circumstances where separation becomes an issue, where assets are much more realistic.
Let's start with the one in the Supreme Court. Standish v Standish..
This case involved a long marriage with minor children and a pot of capital valued at around £1.2billion. The specific issue centred upon which of those assets were a part of the marriage and those that weren't, and how the law should approach this difference in the circumstances of each individual case.
The asset in question here that caused so much fuss was the transfer by Husband (H) from his sole account to Wife (W) of circa £80million cash into her sole name for inheritance tax efficiency purposes and crucially to benefit the children of the family.
That was determined by the court, after much wrangling between H and W, of the intention of them both at the time the transaction was made, pre separation.
H said that was always the intention and therefore this money was not an asset of the marriage to be shared. W said nope. Half of that is mine, because the transfer to her sole name rendered it as an asset of the marriage and it should be shared between them. The court agreed with H, the crucial factor being the intention at the time of the transfer that W hold the funds for the benefit of the parties' children.
The takeaway from this is, when you are together, if either of you wants to mix a sole asset into the assets of the marriage, get it in writing after legal advice to specify the source of the asset and your mutual intentions. Preferably incorporated into a legally enforceable post nuptial agreement.
Speaking of which, the other case, heard in the High Court, pointed specifically to these sorts of agreements.
You can both agree, after marriage, how your assets are to be divided if you separate. This can be legally binding provided that the following principles are observed.
You each disclose your assets to each other in full, so that the overall assets can be seen transparently.
You each either get or have every opportunity to obtain independent legal advice.
There is NO EVIDENCE of undue influence by one over the other, including duress, undue influence, or coercive control.
The agreement is signed by each of you and independently witnessed, with the full updated financial disclosure annexed to it.
A court of law can consider this as a legally binding agreement and enforce it, or reject it, in the event that after the agreement has been concluded as above, the couple subsequently separate and argue about its validity.
In the very recent High Court case reported in The Telegraph, this question arose for the High Court Judge to determine.
Husband was deemed by Wife to threaten her that if she sought to enforce the post nuptial agreement, this would ‘bankrupt the family’. She should ‘go and work in Tesco’ and forfeit the agreement having now separated.
Naturally the court examined the legality of the agreement and was satisfied that all legal tests had been satisfied, and Husband was deemed to have, after the agreement, attempted to exercise undue influence and coercive control, together with emotional blackmail, to seek to deny his Wife of £230 million.
The post nuptial agreement was enforced.
Do not try this at home. There won't be much left if anything. Come and see us whatever your circumstances are so that we can signpost you to a safe and financially proportionate direction of travel. Contact me now on Rob@looselegal.o.uk for more information.
Rob Price
Consultant Solicitor
Loose Legal.
