High Net Worth Divorce Solicitors.

It is important to define matrimonial and non-matrimonial assets as, if the needs of each party can be met by sharing matrimonial assets, it is likely non-matrimonial assets will not need to be shared. In many divorces, the total amount to be shared is not sufficient for this distinction to be of great importance, as all assets are required to meet the needs of each party. That is not always the case with High Net Worth Divorces.

There is no strict definition of non-matrimonial property. Anything which did not form part of the shared assets of the relationship could be included, such as a property acquired before the marriage which did not become the family home. For individuals whose assets are made up in whole or in part of inherited or dynastic wealth, the distinction can be particularly important. Assets which have been handed down within a family will often be considered non-matrimonial assets and arguably will fall outside the scope of a high net worth financial claim.

An accurate valuation of assets is essential in a High Net Worth Divorce. Complex asset portfolios can make this process difficult as wealth is usually spread over a range of business, pension, investment, property and trust interests.

Our specialist team will work with forensic and shadow accountants, and your personal financial advisors, to ensure all assets are accounted for and properly valued. This process is vital if a fair and comprehensive financial outcome is to be achieved.

Full financial disclosure is required in all divorce cases, including assets which are believed to be non-matrimonial. If you suspect your partner has assets which have not been disclosed, we have the experience and expertise to find them. Working alongside forensic accounts and specialist asset tracing professionals, we will strive to ascertain the full extent of the assets owned by your partner.

In many High Net Worth Divorces, this involves questions of international law. We have experience working with overseas family lawyers to support this process.

Occasionally one party in a High Net Worth Divorce may try to transfer assets into the name of a third party or beyond the jurisdiction of the English court. If you are concerned about your partner potentially trying to remove assets from consideration, we can apply for an injunction to stop them.

The court is concerned with the fairness of a financial settlement. As such, non-disclosure of assets, whether that is transferring funds to a non-disclosed bank account or hiding wealth in complex offshore trust schemes, is serious and can have significant consequences.

Search orders allowing entry to premises owned by the suspected non-disclosing party can be made, allowing the representatives of the other party to search for relevant documentation. If there is a risk that assets may be dissipated or transferred, freezing orders can secure those assets. In extreme cases, a non-disclosing party can also be committed to prison for contempt of the court’s disclosure process.

The court can also be asked to draw adverse inferences against a party if it can be shown it has proved impossible to establish the full extent of their wealth. The court will consider the actions of each party during the process and any evidence of non-disclosure of assets, when ruling on a financial award.

High Net Worth Divorces often involve assets held in onshore or offshore trusts. Protecting wealth in this way is a normal and sensible piece of financial planning, but these structures can make determining a financial claim difficult. Trusts can mask both the true ownership of the assets they protect and the identity of the beneficiaries.

It is important to understand the nature and purpose of the trust and the obligations placed upon the trustees. Information about the value and terms of the trust needs to be acquired from trustees and administrators, which can often be a technical and sometimes challenging process. It is also important to ascertain the historic operation of the trust in terms of previous payments to beneficiaries and the reasons for them.

Even after an application for disclosure of information is made, there is no guarantee the trustees will comply. They will need separate legal representation from the divorcing beneficiary. The court cannot force the trustees of a valid discretionary trust to act in a certain way and trustees of overseas trusts may refuse to respond, or refer to the court in their own jurisdiction. The courts of England and Wales can only apply “judicial encouragement” to the trustees to cooperate in advancing funds. Otherwise they may sometimes assume income will be provided to the divorcing beneficiary to assist in meeting his or her financial requirements.

Therefore if your situation involves trying to access funds held in valid trust structures, or protect such assets if a former partner is attempting to include them in a claim, expert legal advice is required from the earliest stages of the process, to ensure a fair outcome is reached.

A family business is often the most valuable asset in a High Net Worth Divorce, but accurately valuing commercial entities can be difficult, particularly if they hold assets overseas or in complex financial structures. Our team work regularly with accounting and other skilled professionals to uncover the ownership structure and extent of the asset holdings of complex businesses.

It can also be difficult or inefficient in tax terms to distribute the assets of a family business or company. Shares in private companies will often be illiquid and difficult to sell to release funds, or one party may simply be unwilling to sell enough shares to satisfy a financial claim (if selling would mean them losing a controlling stake in the company, for example). In these circumstances, if an agreement cannot be reached, or claims to offset against other funds from the matrimonial pot are not available, the business may have to be restructured. In rare cases the company may have to be sold but this tends to be a last resort.

We can draw on the experience of our Corporate Law team and other specialist advisors to provide the best advice to enable you to achieve your financial and commercial objectives.

A special contribution argument is where one party in a divorce claims to have made such a significant “stellar” and one-sided contribution to the combined wealth of a couple that the usual rule of equal sharing of assets should not apply. Special contribution arguments often arise in cases involving successful entrepreneurs, legendary pop stars and inventors.

The courts have been reluctant to recognise special contribution claims, but, in a High Net Worth Divorce, even small deviations from an equal split of assets can be worth millions of pounds, so it is important to consider this argument.

It is important to consider the tax implications of any financial settlement, but especially in a High Net Worth Divorce, where the amounts in question can run to millions of pounds. We will refer you to specialists to advise you of the tax consequences of your proposed financial settlement and ensure you are fully aware of the “net effect” of tax law in the relevant jurisdictions.