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It is often a priority for clients that their pre- marital or post- separation assets are ringfenced and protected from sharing with their spouse on divorce. This may be because that wealth derives from family wealth accrued over generations or perhaps because the spouse has set up a successful business post separation and has accrued new wealth.
We acted for a husband who had been separated for 10 years and divorce proceedings had been started any years previously, but not finalised. The parties had separated assets with the husband transferring the family home entirely to Wife and he restarted his life putting all his energy, knowledge and talent into building a very successful business entirely separate from the Wife who was neither a director nor shareholder. It had not occurred to him that his Wife’s financial claims remained open and she could make claims in respect of his new found and increasing wealth. He believed that the transfer of the family home and division of matrimonial capital was the end of the matter.
During the proceedings, we ringfenced the value of the post-separation business asset successfully, not even requiring a formal valuation of the shares in the business.
A lump sum payment was agreed to be paid to the Wife, which husband was easily able to pay from his investments without the business being impacted or any borrowing being required and a clean break settlement was achieved.
Depending on the needs of the Wife, a similar outcome could have been achieved if the circumstances had been that the business had started prior to the marriage and attempts would have been made to ringfence the value of the husband’s shares on the basis that they were pre-acquired non- matrimonial assets however much would have depended upon the growth in the value of the company during the marriage itself.
We also assist parties to protect existing assets when they are entering into a new committed relationship by advising on and negotiating cohabitation agreements or pre- nuptial agreements which enable agreement to be reached on the extent of the ringfencing of pre- relationship assets. This is particularly important where one party or both are keen to preserve assets for the benefit of children of a previous relationship.
We have also advised clients who have received an inheritance during a rocky marriage and who wished to preserve that as a non- matrimonial asset, not to be shared should there be a future divorce. This was achieved by reaching an agreement on terms and drafting a post- nuptial agreement.
Photo by Scott Graham on Unsplash
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