Walking down the aisle and saying ‘I do’ is, for many, one of the most significant moments in life, but while most go into marriage with good intentions and the desire to make sure the union lasts forever, sadly, it isn’t always the way things work out.
Today, an estimated 50 per cent of all marriages end in divorce. This might sound like rather a depressing statistic, which means it’s better to know what could potentially happen later down the line, while ensuring you put certain measures in place just in case things do go awry. If you’re a spouse who already happens to be at that crossroad, then understanding how best to navigate the separation is key to ensuring your assets are protected and everything is divided up fairly.
This is particularly important for high-net-worth individuals who may go into marriage with a considerable bank balance and a large investment portfolio – and a good family lawyer will be key to ensuring you get the settlement you deserve.
Knowing what is likely to be divided up and how is also essential, as being forewarned means being forearmed. With this in mind, here are four crucial points to consider when preparing for a high-net-worth divorce.
Re-examine your prenup
If you went into your marriage with considerably more assets than your spouse then the chances are you had them sign a prenup – which will make it far easier to get a fair settlement should you decide to go your separate ways.
It’s important, though, to ensure the agreement is reviewed regularly by your lawyer, as assets like businesses can grow and become more valuable over the duration of your marriage, and the value of your investments are also likely to climb in that time.
Essentially, any changes – positive or negative – to the assets that were included in the original agreement must be reflected as they currently stand when divorce proceedings begin, so ensure yours is kept up to date.
Consider your properties
The family home is often one of the biggest sticking points when it comes to navigating divorce proceedings, as often, neither party wants to vacate the property, particularly if there are children involved. The easiest way to go about it is to decide amicably between you who gets to stay and who will leave, but if an agreement can’t be reached then it will be up to the courts to decide on your behalf.
In families with children, the main care-giver will often be given priority when it comes to staying put, but if there are other more complex assets to divide – for example, stocks and shares or shares in a family business – then it can make it easier if the main shareholder concedes the house at this point.
You’ll also need to consider other properties, such as holiday homes or rental properties you own between you, which may or may not have been included in your prenup.
Pensions count
The topic of pensions is certain to arise during divorce proceedings, and it’s important to bear in mind that your spouse may be entitled to a share of yours.
In England, Wales and Northern Ireland, the value of all workplace and private pensions is included in divorce settlements, whether they were built up before or during a marriage or civil partnership. Generally, the starting point for dividing up pensions is a 50:50 split, but this may be adjusted by both parties in agreement, or by the courts, if it is deemed to be unfair or is likely to leave one party out of pocket. Each divorce settlement is different, which means the treatment of any pensions will also vary from case to case.
Beware non-disclosure
Sometimes, non-disclosure comes into play, which is where one or both parties involved in a divorce refuse to disclose their financial position in full. This generally happens where one party is seeking to gain a financial advantage over the other and where a large number of assets and investments that are complex in nature are involved, and can make it difficult for the courts to clearly see what exactly should be the subject or any divisions between the divorcing spouses.
It is, however, illegal to conceal your assets during divorce proceedings, so don’t be tempted to do it yourself, and if you suspect the other party is doing so then you should let your lawyer know immediately so they can take the relevant action on your behalf.
