Monday, June 04, 2007
Can I interest you in a Pre-Nup?
It is difficult to feel sorry for the rich but the Divorce regime in this country does appear biased against wealthy individuals divorcing their less wealthy spouses. The recent Court of Appeal case in Charman has reinforced the House of Lords case of White - equality, the less wealthy non earning spouse, is no longer simply entitled to have her needs met, which in Mrs Charman's case would have meant her accepting Mr Charman's offer of £20 million, instead of the £48 million she has received. Indeed (great word, a bit pompous but draws you in) the starting position in distribution of capital is a 50/50 split unless there are compelling reasons for departure such as:
1. Stellar contribution, and stellar means stellar, not simply making millions of pounds. Moreover, even if your exceptional efforts are recognised, the Courts will still consider it fair to give the non earning spouse between 33.3% and 45%. Nice .
Where's the moral argument?
Nowhere, behaviour has no place in settling battles over the matrimonial finances. So, in the recent House of Lords case of Miller, Mr Miller left his wife for a newer model, fair game for the newspapers to pour scorn on him. What of the hard working millionaire whose wife leaves him for the tennis coach? Tough, same deal.
2. Non matrimonial assets, acquired pre the union and kept separate, but the matrimonial home will be given special treatment. There is no guarantee this argument will succeed if the other party has an unfulfilled need.
The facts in the case of White were that they had a family farm that the wife had worked in for many years. The facts in Charman are that he is an insurance magnet. He was bound to lose but you can understand his frustration at the interpretation the Courts are obliged to follow.
How does this trickle down to the rest of us?
Very badly. In the past, the non earning spouse with the kids could expect to get at least 70% of the capital to rehouse herself and her children . Now the equality argument means that she has to convince the Court that her need is overwhelming and cases are settling more in the 45%/55%. An attempt to introduce equality has made life worse for the lower earning spouse in lower value cases.
What to do?
Anyone with more assets that their intended spouse who does not take out a pre-nuptial agreement is asking for trouble. They are not binding on Judges but they are one of the factors which they can consider and in recent judgements they have given them credence.
An article in The Times yesterday goes further, recommending people take out a post nuptial agreement!!!!!!!!!!!!!!!! You have been warned!!!!!!!!!!!!!!!!!!!!