High Net Worth Divorce Solicitors
Couples in a high net worth divorce face a unique set of challenges compared to a normal divorce. Many complex issues must be considered including the valuation and uncovering of extensive assets, often held across international jurisdictions in complicated corporate and trust structures.
Financial matters are not the only issue at stake. High net worth individuals often live fast-paced international - and sometimes public – lives, which means reputations, as well as different teams of professionals, have to be managed.
High Net Worth Solicitors
At Rowlinsons we have experience in helping high net worth divorcing couples get the fairest outcome.
At Rowlinsons, we understand that divorce is always a sensitive and emotional time, no matter what your financial status and especially when you have children. As members of Resolution and with a specialist mediator and collaborative lawyer on our team we are committed to a conflict-free, constructive process.
For help with your high net worth divorce get in touch today or arrange a call back. We also have meeting facilities in North Wales to provide a welcoming, confidential space for our family law clients.
Understanding the challenges of high net divorce compared to a normal divorce.
High net worth divorces are rarely straightforward and often involve complex legal and commercial issues requiring high levels of legal expertise and robust representation. There can be issues involving international jurisdiction, diverse assets, and reputational risk.
We will liaise with your financial and personal team to make sure you stay informed without being inundated so you have peace of mind that you can get the best outcome for you, personally and financially.
Definition of needs – obtaining a fair result
In England and Wales, the court strives to get a fair outcome. It will seek to meet the needs of both parties involved. However, in a high net worth divorce, it’s a little different as the financial stakes are considerably higher compared with a regular divorce.
With substantial assets, sometimes amounting to hundreds of millions of pounds, the expectations of both parties reflect this accordingly. The accustomed standard of living for high-net-worth couples is higher than normal and the court will take this into account. This means that ‘needs’ could be millions of pounds.
Dealing with trusts
Often onshore or offshore trusts are involved in a high net worth divorce. A trust structure is a common way to protect wealth as part of sensible financial planning. However, dealing with assets held in trust is difficult. The complex nature of trusts means the identity of the owners and beneficiaries of the assets can easily be hidden.
Assets tied up in the trust could be considered if it can be proved the trust is a relevant financial resource or if analysis reveals a nuptial element.
A substantial amount of wealth can be held this way so it’s important to fully understand the purpose of the trust. This information will have a significant impact on the outcome of the financial settlement.
In England and Wales, a request can be made to trustees to disclose discretionary information on the trust including the value and terms of the trust and any historic operations including payments to beneficiaries.
That is not to say the trustees will comply. They will need their own legal representation. The court cannot compel trustees to act a certain way and trustees of overseas trusts may not respond at all or refer to the court in their own jurisdiction.
It is essential to get legal advice early on whether you seek to gain access to or protect funds held in valid trust structures.
Businesses and companies
A privately owned business is frequently the most valuable asset in a high net worth divorce.
Getting an accurate valuation of a business can be highly complicated, particularly for large companies which may have assets in complex onshore and offshore structures around the world.
Our family lawyers will work closely with our commercial law team which has experience in dealing with business matters for companies of all sizes. We can reveal any obscured company ownership structure, get to the bottom of complex financial structures, and find concealed assets.
It can be difficult to distribute businesses on divorce. Where shares are illiquid, or one party would prefer to hold onto their shares (for example to maintain a controlling stake) it may be impractical or impossible to sell shares or even inefficient in tax terms. Company assets may have to be restructured if an agreement cannot be reached and in extreme cases, the company may have to be sold but this is the last resort.
What happens to the family business is frequently the main concern for spouses in a high net worth financial settlement. We’re experienced at negotiating with the other party to help you achieve your goals.
High net worth individuals may be high-profile entrepreneurs, sports stars, media personalities, and musicians who are consistently in the public eye. We understand the need to tread carefully when dealing with matters in the divorce as you don’t want to risk any damage to your reputation. We’ll help you weigh up the balance between striving for the best deal for you and conducting proceedings respectfully to maintain your good reputation.
If you want to keep matters out of the court process arbitration, mediation or collaborative law might be the best option for you. We have an experienced collaborative lawyer on our team who can help you decide if this is the best process for you.
In a divorce in England and Wales, full financial disclosure is required by the court. In a high net worth divorce, it’s not uncommon for the financially stronger spouse to attempt to avoid full financial disclosure to frustrate a financial claim and gain an advantage.
There are many ways to hide assets, including tying the money up in complex corporate or trust structures, transferring funds to undisclosed or offshore bank accounts or transferring property to another party.
Gaining an accurate valuation of assets when they are held in many different complex or hidden locations is challenging. Our family law team work with forensic accountants and other skilled professionals to trace your ex-partner’s undisclosed assets and uncover the true ownership structure.
If you’re concerned that your ex-spouse will move his or her assets away from the reach of the court, we can help you in the application of emergency remedies which will help to reveal the extent of undisclosed assets and thwart any attempt to hide them.
Search orders - where authorities will enter premises owned or occupied by the respondent to look for relevant documentation.
Freezing orders - where undisclosed assets are located the other spouse can apply for a freezing order to prevent them from transferring, selling, or dealing with the assets.
Imprisonment – in extreme cases the person concealing the assets can be sent to jail.
Sometimes it’s nearly impossible to uncover all hidden assets. When the scale of non-disclosure cannot be fully uncovered at trial you can ask the court to draw adverse inferences against the spouse in question. Sometimes the court can be persuaded that there is a significant value in undisclosed assets.
Defining non-matrimonial property
Non-matrimonial assets are any assets which were built up outside of the marriage. This may be before marriage or after divorce proceedings have begun. These assets often include family businesses and heirlooms which contribute to dynastic wealth.
The distinction between matrimonial and non-matrimonial property in a high net worth divorce is crucial because of the high value of assets involved. Non-matrimonial property likely won’t be shared. In a standard divorce, non-matrimonial assets may have to be included to meet the needs of both parties in the financial settlement. With a high net worth divorce, the marital assets should be sufficient to meet these needs.
Sometimes one party asks the court for a departure from equal sharing of assets because of what is known as a ‘special contribution.’
The argument is that this individual made such a significant contribution to the couple’s wealth that an exception to the usual rule of equality should apply. These claims are usually made by entrepreneurs, legendary pop stars and inventors who’ve reached stellar heights of success through their work. The courts are reluctant to grant recognition to special contribution claims but it’s important to build a strong case for or against either way.
High net worth individuals often live or own property in a variety of jurisdictions so they have a choice in where they can divorce.
The location of your divorce makes a significant impact on how your case is dealt with. The size of the award and financial settlement may vary dramatically depending on court jurisdiction.
Therefore, choosing the most suitable forum for divorce proceedings has a significant impact on the outcome. The English court system is known for its commitment to a fair financial result for both parties in a divorce whereas other jurisdictions are not as flexible.
This means it’s essential to get advice as soon as possible as you enter high net worth divorce proceedings. Rowlinson can help with forum disputes to help you secure the most favourable jurisdiction for your high net worth divorce.
In any divorce, you must consider the ‘net effect’ of a financial settlement, and this is especially true for a high net worth divorce where the tax consequences can run to millions of pounds. We can work closely with your tax advisor and accountants and can refer you to UK tax specialists to help you understand the tax consequences of your proposed financial settlement.