The high profile divorces of wealthy entrepreneurs, such as Dragons Den stars Duncan Bannatyne and Hilary Devey and Formula 1 supremo Bernie Ecclestone, tend to result in lots of comments on social media about the fairness of divorce settlements. Slavica Ecclestone scooped a whopping £740,000,000 after 23 years of marriage.
Entrepreneurs complain that the UK court system is not fair and fails to take into account of wealth that has built up due to their business acumen or employment.
Some are of the view that couples should take out of the marriage only what they put in, but is this fair, where one parent has given up a career in order to support the family?
Divorce law expert, Susan Davies of Ansons Solicitors in Lichfield explains that it is the court’s role to see that family wealth is divided “fairly” so as to meet the needs of the parties and more importantly any dependent children. The courts consider that marital assets should be shared but are very clear that contributions to the marriage by parties, whether that be earning an income or looking after the home and children, are considered just as important as each other.
Assets that have been acquired by the husband or wife before the marriage, or after separation, can be treated differently by the courts to those that have built up during the marriage. But if the needs of the parties require it, even those can be used to achieve “fairness”.
The longer the marriage, the more likely the courts will share the wealth, and the presence of dependent children will make the needs argument even more important.
If an entrepreneur or someone with substantial inherited wealth wishes to try and protect assets or income and avoid the principle of the sharing, then the obvious step is to consider entering into a pre-nuptial agreement prior to getting married.
Pre-nuptial agreements are becoming more and more influential in divorce proceedings, provided they are prepared correctly and adhere to certain important requirements. There is still no getting away from the principle of “fairness” even then but they can be very useful documents. Whilst not romantic, they most certainly shall be considered in situations where one party has wealth acquired before agreeing to marry or perhaps where they are entering into a second or subsequent marriage.