High Net Worth Divorces

High Net Worth divorces often involve complex and challenging issues that require careful consideration and expert legal advice. A "high net worth divorce" typically applies to cases where one or both parties have significant income or hold substantial assets.

Income

Key considerations include:

  1. Spousal maintenance – Determining whether maintenance should be paid, the amount, and the duration.
  2. Self-employed spouses – Evaluating their ability to maximise income from a business.
  3. Annual bonuses – Deciding if bonuses should be factored into the divorce settlement.
  4. Capitalisation of maintenance claims – Exploring whether a spouse should receive a greater share of assets in exchange for waiving maintenance claims.

  
Trust Assets

Divorce courts possess extensive powers and require full disclosure of the establishment, purpose, and financial details of any Trust before determining how these assets should be treated.

Key considerations include:

  1. When and why the Trust was established.
  2. Availability of income or assets to a spouse under the Trust’s terms.
  3. Whether the Trust qualifies as a financial resource available to a spouse.
  4. If the Trust constitutes a "nuptial agreement" (e.g., continuing provision for spouses).
  5. The existence of offshore Trusts and jurisdictional challenges. Courts may consider accessing other assets within their jurisdiction as part of the division.
  6. Whether Trustees need to join the court proceedings.

  
Land and Property

Accurate valuation of land and property is critical, especially for large estates or properties with development potential. Appointed surveyors must receive clear instructions to ensure fair valuations.

Key considerations include:

  1. Engaging an appropriate expert for valuations.
  2. Assessing Capital Gains Tax (CGT) and other tax implications when disposing of properties.
  3. Evaluating the impact of property sales on the parties and any businesses involved.

  
Non-Matrimonial Wealth

Divorce courts distinguish between "matrimonial" assets (acquired during the relationship) and "non-matrimonial" assets (often built up prior to or after the marriage, or introduced through inheritance or other external sources). Identifying and managing these distinctions is essential.

Key considerations include:

  1. Whether assets are deemed non-matrimonial by the court.
  2. How non-matrimonial assets were managed during the relationship.
  3. The extent to which non-matrimonial assets should be included in the division.

  
Business Interests

Divorces involving business assets present unique challenges, including valuation, liquidity, and operational continuity. Independent valuations by accountants are often necessary to ensure fairness.

Key considerations include:

  1. Whether third-party business owners need to participate in court proceedings.
  2. If a shareholding qualifies as a "quasi-partnership," potentially affecting valuation discounts.
  3. Tax and liquidity implications of extracting funds from the business for settlements.
  4. Assessing realistic income from the business for the spouse retaining it.
  5. Determining appropriate adjustments for risk when exchanging business ownership for other assets.
  6. The impact of generational wealth within the business on settlements.

 
Special and Unmatched Contributions

The courts are very reluctant to find that one party has made a special and unmatched contribution which should result in one party retaining more of the assets. The courts will normally only allow such arguments to be put forward in ultra-high net worth cases where the capital is over £50 million. When such wealth exists and where there are potential arguments in relation to special and unmatched contributions, careful and robust arguments are required.

Pensions

Pensions often form a significant part of high net worth divorce settlements. Proper valuation and specialist advice are essential for understanding the implications of different pension types.

Key considerations include:

  1. Valuing properties held within SIPPs.
  2. Tax implications of pension division.
  3. Whether to involve an actuary for pension reports.
  4. Ensuring accuracy of defined benefit scheme valuations.
  5. Negotiating cash exchanges in lieu of pension claims.

  
High-Value Personal Belongings

Chattels such as cars, artwork, and furniture require proper valuation in high net worth divorces. Accurate valuation ensures fair representation in the division of assets.

Contact us on Sheffield 0114 551 7555 for a free 30-minute Initial Information Consultation or book a Preliminary Advice Meeting, tailored to your specific circumstances and followed up in writing. 

Preliminary Advice Meeting Options:

1) Divorce - £210 + VAT at 20%
To discuss matters arising out of relationship breakdown including divorce, finances, property, pensions and other assets, as well as arrangements for your children.

2) Children - £200 + VAT at 20%
To discuss issues solely relating to children following separation including who they will live with, contact, holidays abroad, relocation, changing schools or any other specific issues.

This meeting may be free if there are issues involving Domestic Abuse or Children's Services.

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