Duncan Lewis High Net Worth Divorce Solicitors – Complex Financial & Ownership Structures
Separating complex financial and ownership structures
The historic case of White v White in 2000 introduces the ‘Sharing Principle’ which is based on the idea that both parties contribute equally to the marriage an so there should be an equal division of assets; however, the court’s objective will be to achieve a ‘fair’ outcome by taking into account all considerations and it still has a wide discretion when making orders, paying specific regard to those listed in S25 (2) of the Matrimonial Causes Act 1973:
- the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire
- the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future
- the standard of living enjoyed by the family before the breakdown of the marriage
- the age of each party to the marriage and the duration of the marriage
- any physical or mental disability of either of the parties to the marriage
- the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family
- the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it
- in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit . . . which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring
Where there is an excess of assets comprised of property or inherited assets, these assets are likely to remain with the legal owner or beneficiary. Problems occur when assets are comprised of trust assets or business assets that involve third party interests. In these cases, the precise ownership of these assets will be a significant factor in assisting the court to decide on a fair outcome.
Assets acquired, inherited or gifted to one party in advance the marriage may set it outside of what is considered to be a ‘marital asset’; however, should these assets have been used and/or enjoyed by both parties during the marriage, what is thought ‘marital property’ can be more uncertain.
In a lengthy marriage departure from equality is rare, and something the court is disinclined to do, though, in exceptional circumstances, a dispute for one party’s ‘Special Contribution’ can be heard. The important cases of Miller v Miller; McFarlane v McFarlane and Charman v Charman provide guidance on what constitutes a ‘Special Contribution’. This includes:
- The special contribution by one party is unrivalled by the other
- The departure from equality as a result of the special contribution being recognised does not discriminate the home-maker party
- Exceptional earnings can be considered, but only when it would be inequitable to proceed otherwise
- The characteristics or circumstances are of a wholly exceptional nature such that it would be very obviously inconsistent with the objective of achieving fairness for them to be disregarded
- The party claiming the basis for ‘special contribution’ applies to them, will need to successfully establish their exceptional or individual quality that was responsible for the generation of vast wealth
- It is not enough that vast wealth is achieved by way of a financial windfall.
Duncan Lewis High Net Worth Divorce Solicitors offer specialist legal advice on all complex financial and ownership structure related matters to those individuals with assets in excess of 1 million pounds. For expert legal advice call Duncan Lewis Divorce Solicitors in confidence on 033 3772 0409 or contact us via our online contact form.