Going through a divorce, the dissolution of a civil partnership or a separation can be extremely stressful and is likely to have a long-lasting impact on you and your family. This is particularly the case if you're going through a high net worth divorce as they can become increasingly difficult and much more complex as children, property, businesses, pensions, inheritances and other assets can become involved.
It is absolutely crucial to get legal advice at the earliest opportunity and this can help the divorce to progress quickly with less conflict and animosity therefore saving time, money and stress in the long run. Having confidence in your legal team and building a strong working relationship is essential from the start.
'High net worth' is considered to be where the assets of either one party or both parties exceed their financial needs and expenses. Financial wealth can include trusts, properties, personal assets and business assets, onshore and offshore assets, inherited wealth and pensions.
Quite often a trust may be involved which contains a significant amount of the parties' wealth and consequently, how these trust assets are treated can have a critical impact on the outcome of the case. Attacking and defending both onshore and offshore trust is a very difficult process.
In any divorce, there is always an obligation to make full and frank disclosure of all financial information but in high net worth divorces, the financial stakes are extremely high. Some spouses may refuse to make disclosure of their financial position in an attempt to gain financial advantage over the other spouse.
In the case of Scot Young, a property developer who separated from his wife, Michelle Young in 2006, their divorce settlement was not resolved for a further 8 years after separation and it highlights the need for full and frank disclosure. In this case, Mr Young refused to disclose his assets and ultimately, had to serve a 6 month prison sentence for contempt of Court. He was ordered to pay his wife the sum of £26million after initially claiming that he had no assets.
Disclosure is particularly contentious regarding trusts because if a trust is located in England and Wales, requests can be made to the trustees to provide documentation about the trust but if the trust is located offshore, disclosure can be difficult.
Applications can be made to the court for emergency remedies such as search orders, freezing orders and applications for committal of a non-disclosing spouses to prison.
There are sometimes special considerations when it comes to distribution of wealth. Some of the arguments which may arise are whether assets should be properly classified as matrimonial assets or non-matrimonial asset. The parties 'needs' also have to be computed in a more generous way than in an ordinary divorce case.
When Mel Gibson divorced after 30 years of marriage, it was one of the largest in 'Hollywood' history where his then wife, Robyn Moore, settled for $425 million! She is also entitled to half of his future earnings for his entire life. It was rumoured that Mel Gibson had more than $100 million in real estate investments worldwide including an island in Fiji.
This case highlights the need to obtain up to date valuations for all properties and consider the tax implications with transfers and disposals of such property.
A significant asset to consider may well be a business. The position can often be complicated if the business is active and there are assets all over the world, held in complex webs of interrelated onshore and offshore corporate and trust structures. Businesses can also be very difficult to distribute upon divorce and it may well be impractical or impossible to sell shares. The fate of a business is often the most important financial concern for some spouses upon divorce.
In the divorce of Jeff Bezos, the founder of Amazon, he provided to his wife in the divorce settlement the share of 4% of Amazon. This was reputed to be worth an eye watering $29billion!
The wealth of high net worth individuals may be derived in whole or in part from their family. The origin of such wealth can often justify departure from equality such as dynastic wealth which is likely to be classed as non-matrimonial property and again, if such wealth is held in long established complex onshore and/or offshore trust structures, even greater complexity arises.
Where one spouse has generated significant wealth, they may argue that there are special and unmatched financial contributions to a marriage so there should be a departure from equality.
Quite often, high net worth individuals have a jet setting lifestyle so there may well be international complications and arguments arising over jurisdiction may be a relevant consideration given that the choice over jurisdiction can have enormous implications. England and Wales is hailed as the divorce capital of the world but in some other jurisdictions, there is inflexibility and there may well be less generous financial provisions.
Most recently, the tabloids reported that the impending divorce of Bill and Melinda Gates after 27 years of marriage has possibly led to the parties entering into a Separation Agreement. Bill Gates is reported to be the 4th richest person on the planet with an estimated fortune of $124billion. There has clearly been discussions as to the division of assets and whilst there was no Pre-Nuptial Agreement, this case does emphasise that timely and expert legal advice and assistance can smooth out thorny issues, and pave the way for an amicable solution to complex difficulties thereby ultimately, reducing hostility and animosity between the parties and avoiding expensive and public battles in the Court room.
Please contact us here at Gepp Solicitors where you can obtain expert advice surrounding divorce, separation, wealth management, estate planning including wills and trusts, and tax issues that may arise in such matters.
Gepp Solicitors are one of the region’s leading law firms and have been providing clear legal advice on all aspects of family law for generations. Please contact our us on 01245 228106 to speak to one of our dedicated family law solicitors in confidence.
This is not legal advice; it is intended to provide information of general interest about current legal issues