Christmas and New Year can be a stressful time for couples whose relationships are coming under strain. Spending an enforced period of time together, often with other family members present, can highlight problems that have been bubbling under the surface. January is often a busy month for divorce solicitors handling the fall-out of the festive holidays. This is the case for couples with all levels of income and assets. However, when it comes to high net worth divorce, the stakes can be even higher. It can be harder to agree on the division of assets when there is a lot more of it to share out.
Unpicking more substantial savings accounts, trusts, pensions, land and the value of shared property and assets can take a lot longer and involve more complicated arrangements. There may be trusts in place and tax implications for assets placed offshore. It is prudent, when entering into a marriage or civil partnership involving larger amounts of wealth to make plans for protecting and dividing assets in the case of a split further down the line.
Pre-nuptial agreements and high net worth divorce
A pre-nuptial agreement is a document drawn up before a couple marry or enter into a civil partnership. It outlines what will happen to assets brought into the union, and earned during it, in the event of a split. They can also cover anticipated inheritances and trust funds. It is common for pre-nuptial agreements to be drawn up where one party earns significantly more than the other, or there is a high level of family wealth involved from one or both sides. They are also frequently found in cases where highly successful family businesses play a large part in providing assets and income for the couple and their wider family.
Prenuptial agreements are not yet considered to be legally binding by law courts in England and Wales. However, they are taken seriously in the event of a high net worth divorce. They can influence the decisions taken by the judge about distribution of assets. Also, they can include conditions around fidelity and agreements around looking after children that must be fulfilled for the assets to be divided as agreed.
Children, dependents and high net worth divorce
As with any break-down of a marriage or civil partnership, the safety and ongoing care of dependents must be of paramount importance. Instructions for how children should be supported can be included in a pre-nuptial agreement, including if they are from a previous marriage or union. Issues that need to be agreed regarding children during a high net worth divorce include contact and custody, maintenance levels, education choices and funding school and higher education fees, lifestyle and where the children will live.
Depending on the age and competencies of any children involved, a court may ask their opinion about what they want to happen to them after a high net worth divorce. The court may also need to take practicalities into account when making decisions, such as the amount of international travel one or both parties do for work and whether the child would benefit from boarding school if one or both parents are often away from home. There may also be other lifestyle points to consider, such as the continuation of expensive hobbies or access to assets such as vehicles, second homes and electronics.
Other considerations in high net worth divorce cases
As well as caring for children and dividing assets, other issues may exist that are unique to, or more commonly found in high net worth divorces. Where one or both parties are well-known public figures, there may be requirements for non-disclosure agreements to be drawn up. These can also be useful in cases where family businesses could be compromised if sensitive information is revealed.
Another complex area is around special contributions. This can be in the form of one-off financial support provided by one spouse to the other to start a business, for example, or invest in a property that went on to increase its value exponentially. Then, there are non-financial contributions, such as one partner staying home to raise children or curtailing their own earning power to provide practical and emotional support for the other’s high-flying career. International high net worth divorces also bring added complexities around immigration status, children’s nationalities, on and offshore assets and the legalities behind different types of secular and religious marriages and divorce or separation processes around the world.