Quick insight series: Divorce & Wealth – 5 Things That Could Complicate Your Family Law Case
Informal agreements about property, parenting or finances may seem sensible, but without a binding court order they are not secure, so you should always get legal advice. In a divorce, you must disclose all assets, including any held in someone else’s name where you have a beneficial interest, as well as businesses and any company shares, which may form part of the matrimonial pot. Inheritances and large gifts can also be taken into account, depending on when they were received, how they were used and whether the parties’ needs can be met from other resources. If you move in with a new partner before sorting out your divorce finances, you must disclose that cohabitation and your new partner’s financial position may also be considered. By Estella Newbold-Brown head of family law, Amphlett Lissimore
Informal agreements
If you made or have an informal agreement in place with your spouse, for example about property, parenting, or finances – always get legal advice. Informal agreements can seem like a good idea, but if you do not have a binding court order, then either of you may still have claims against the other.
Assets held in Someone else’s name
Estimated reading time: 4 minutes
All assets in a marriage, need to be disclosed. Even if it is in someone else’s name but you have a beneficial interest in it, you will need advice as to whether it is considered a matrimonial asset, subject to division. If you transfer a property into another person’s name to defeat your ex from making a claim, then the court do have the power to ‘un-do’ that transfer and proceedings to deal with this are very complex, costly and costs order can be made against the losing party.
Inheritance or Large Gifts
This may be seen as a relevant resource subject to division but how far it will be considered, depends on several factors. It ultimately depends on when the gift or inheritance was received, how the money has been used and at time of separation whether the needs of the parties can be met from the rest of the resources available.
Owning a Business
In a divorce, your business is considered as an asset. Its value will be included in the ‘matrimonial pot’ which may be divided between you and your spouse by the Court. Any interest that a party has in respect of a company will need to be disclosed as part of the duty of full and frank disclosure. How heavily the business will play as a role in the divorce will depend upon the nature of the business, for how long it has been running, and the involvement the spouse has in that business. If you were established in your business before your marriage, it may not fall into the matrimonial pot. This is the general rule of thumb for assets already owned before marriage. However, this does need to be balanced against fairness, and it is likely that the Court may award the other spouse with a share of the increase in value of the business, from during the marriage
New Relationships
If you decide to move in with your new partner but you have not resolved the financial aspects of your divorce, you will need to disclose your cohabitation, and it is not unusual for the income, assets and liabilities of your new partner to also be disclosed.
Key Takeaways
- Always seek legal advice for informal agreements regarding property, parenting, or finances, as these may not be binding.
- Disclose all assets, even if held in someone else’s name, to determine if they are matrimonial assets subject to division.
- Gifts and inheritances may be considered for division, depending on timing and usage, as well as the parties’ needs at separation.
- Businesses count as assets in a divorce and may need to be disclosed; generally, pre-marital businesses may not be included but could affect fairness in asset division.
- When entering a new relationship before finalising a divorce, you must disclose cohabitation, as well as your new partner’s financials.
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