Whilst the new "no-fault "divorce procedure may have streamlined the process for dealing with legally ending a marriage/civil partnership, the really complex issues of deciding the arrangements for the children and dividing up the family finances remain.
Both of these areas are complex in their own right.
For the purposes of this article, we will concentrate on the family finances in circumstances where the value of the assets is high.
Dividing Assets During A Divorce
Often where the assets are of significant value, the manner in which they are held can be complicated.
There may be an imbalance between the parties in relation to who holds those assets, and it may not be entirely clear as to their extent.
The first thing to establish is the extent of those assets.
Though both parties are obligated to provide full disclosure of the assets they hold, there is a risk that the party with more to lose may want to hide assets.
In those circumstances, an expert forensic accountant's report is often required to trace assets. It is a high‐risk strategy for a party to try and hide assets as it may lead a court to make an order that penalises that party for their deceit.
Correctly identifying all the assets is only part of the story. Establishing the value of those assets presents more difficulty.
The ownership of a business can result in a diverse set of issues when trying to work out what that business is worth and how a party's interest in that business may be realised for division amongst the parties. Interests may be held in complex corporate structures and involve third parties. This is why an expert accountant's report may be required.
The accountant will be able to independently value the business and provide an opinion on how a party's interest may be released for division.
Assets Held On Trust
Another challenging area involves those assets held on trust.
Holding assets on trust can be beneficial for tax efficiency or as part of inheritance tax planning. It does, however, mean that dealing with trusts' assets within matrimonial proceedings is more complicated.
A trust has trustees appointed to make decisions about trust property, and often they have a wide discretion which overrides the wishes of beneficiaries. In effect, they cannot tell the trustees what to do.
Offshore trusts are particularly hard to deal with where the country in which they are based does not have the same reporting and disclosure obligations as we do in England & Wales. Trustees are a third party, and this often requires careful handling to ascertain details about the trust, its operation and how a party's interest in that trust can be realised.
Inherited Family Wealth
Not all wealth is derived from employment or business ownership, and sometimes it comes in the form of inherited family wealth.
One or both parties may benefit from this, which often leads to disputes over whether the other party is to gain from this.
Again, such family wealth is often held in a complex way where assets may be owned in conjunction with other family members.
There are, therefore, the competing interests of those other family members to deal with. An example of this may be a family farm where it is owned and farmed by not only the party to the divorce but also their parents and perhaps a brother.
Find Out How Monan Gozzett Can Help
Whilst the above factors are by no means an exhaustive list of the issues that may arise in high-value cases, they are a good indication of the additional complexity that they present.
Being able to properly identify assets, value them and understand how they may be used to our client’s best advantage at an early stage differentiates Monan Gozzett from many of its competitors.
Not only do we have at our disposal a range of external financial experts but also in-house expertise in the form of Tom Phillips FCA.
He has many years of real-world experience in advising FTSE 100 companies. Tom can significantly benefit high-value divorce matters through his strategic, insightful analysis of complex business and income structures, trust and family wealth arrangements.
Instructing a firm with the right level of experience and expertise is crucial to obtaining the best possible outcome for you.
We at Monan Gozzett have the knowledge to help you get the best outcome possible. If you would like to discuss matters with Alastair and his team, please contact our Arundel office using the details below.