There are about 2,800,000 millionaires in the UK, which is 5.4% of the total UK population. And in 2021, there were another 258,000 millionaires added to that list.
The following article applies to these high net worth, married (or civil partnership) households, where one spouse (or civil partner) is considering ending the marriage.
Pros and cons to being wealthy when divorce proceedings start
The most obvious advantage is there should be enough money to separately house each of the partners and their children, from the resources of the original family unit.
But on the downside, there is a lot more to argue over. Big things, like business shares, can be hard to value. Sometimes, wealth comprises a list of properties or other assets, such as rental properties and things can get quickly complicated, if a couple argues about what every asset detail is worth, or where the money came from in the first place.
Will my divorce cost me more because we are wealthy?
All good family lawyers will tell you, that what makes many divorce settlements expensive, is prolonged and unnecessary conflict. If the divorcing couple carefully measures the potential costs of continuing a particular argument, versus the benefits of compromising to draw a line under it, they will often avoid those long, intense and expensive legal conflicts.
How do I choose a good divorce lawyer?
So, the first step is to appoint a lawyer who is on your side, but who has a conciliatory approach. Make sure they have the experience to understand what a good compromise is. Compromise is not simply repeating what you want in the hope that the other person will change their mind. It involves two people, each giving up something they would ideally prefer, to achieve an outcome that is workable.
What is Disclosure and do I have to disclose everything?
Having selected the right lawyer, the couple should go through the process of Disclosure. It sets the right tone if this step is done voluntarily within mediation or the collaborative law process. It involves compiling a list of what that couple own, owe, earn, and spend.
At this point, they may not agree, what their assets are worth. Let us take the example of houses. A and B own a string of rental properties. There is no point, A & B arguing between themselves about what these properties are worth. Instead, early on, they should instruct a ‘single joint valuation expert’ in-line with the court’s rules. The expert will charge a fee, but (s)he is under a legal duty both to provide an accurate valuation, and to be impartial. It is no longer acceptable to turn up at Court with the husband’s expert, and the wife’s expert, arguing.
Disclosure is based on openness; do not try to be too clever about hiding things. If things are unclear, your ‘ex’ may simply ask more and more questions, delaying settlement and adding to the cost. In addition, The Family Court has the power to force disclosure. They can even reverse transactions, that have been done to put property out of the other party’s reach. So, there is no point, transferring assets to a family member or related company, and saying, ‘I do not own that asset anymore’.
What other types of experts should I be consulting with?
Asset valuation experts are not the only experts that are needed. Divorce, and the transfer/sale of assets, will affect your taxes. For example, the application of capital gains tax. There are some exemptions from CGT, when you dispose of a family home, but those exemptions do not apply to company shares or investment properties. Get specialist tax advice from an accountant, on what tax you might have to pay when you divide your family’s assets. You need to know what ‘net’ you will end up with after the HMRC has taken their portion.
What will the Judge look at when making the Financial Order decision?
Couples often forget that Divorce Judges do not pay much attention to where property came from, or whose name is on the Land Register. They are much more concerned with need. So couples in the process of negotiation, should be encouraged to come up with outcomes that leave each of them properly housed and provided for. A Judge is not going to examine in too much detail (if at all); who earnt more, who was out of town working, who cooked more meals, who did more school runs, who had an affair, etc. Those may be the reasons you are divorcing, but they do not influence how the assets are split.
How Hopkins Solicitors Can Help You
In this meeting will listen to your full story and give you legal advice that is specific to your personal situation. It includes a detailed follow-up advice letter covering everything discussed such as: your legal options, the steps involved and estimated costs.
After the meeting there is no pressure to hire us straight away. We understand that often at this stage, you may simply be doing your research to understand what legal options you have.
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