In regular divorce cases, usually, the biggest challenge is ensuring a “fair and equitable” split of the family home and any pension funds. In high net worth divorce cases, issues can range from establishing jurisdiction to locating and valuing assets. Here is a quick guide to understanding HNW divorce.
In non-HNW divorce cases, both parties are generally permanently settled in one country. It is, therefore, both obvious and indisputable that the court of that country has jurisdiction over the divorce. In HNW divorce cases, this is not necessarily the case.
If it isn’t, then care should be taken to choose the most appropriate location for the divorce case to be heard.
Locating and valuing assets
Even when parties are splitting amicably, managing valuations of assets can be complicated. HNW assets not only tend to be held globally but can also be held in a variety of legal structures. In particular, they may be held in trusts of different natures.
When one party in a divorce is not cooperative, establishing the full extent of their assets often requires a finely-balanced blend of tact and tenacity. Sometimes, non-cooperative parties can be persuaded to comply if they are made aware that it is, ultimately, in their best interests to do so.
For example, if it later emerges that they did not make a full disclosure of their assets, there could be serious legal consequences for them.
If this fails, then it is essentially a matter of tenacity and, in many cases, negotiating skills. Finding assets, particularly those wrapped up in offshore trusts, generally boils down to the ability to follow an often-complex (digital) paper trail.
Once the assets are located, the relevant people have to be persuaded, or required, to hand over the relevant information. Sometimes legal orders from English courts will be accepted, sometimes they will not.
Sometimes nothing will persuade or compel people to hand over information, in which case the solicitor acting for the other party will need to offer the court an estimated value with a justification for the estimation.
Establishing matrimonial versus non-matrimonial assets
As a rule of thumb, in England, divorce settlements will be based on matrimonial assets. Non-matrimonial assets will only be considered if the matrimonial assets cannot make sufficient provision for the needs of one of the parties.
This means that it is vital to determine which assets are matrimonial and which assets are non-matrimonial.
In general, assets will be considered matrimonial if they were acquired after the marriage but before the separation. Assets acquired before the marriage are only likely to be considered matrimonial if it can be shown that they were treated as matrimonial assets, even if they were never legally designated as being jointly owned.
For example, if one party owned a house prior to their marriage and it subsequently became the main family home, then it might well be considered a matrimonial asset. By contrast, a property acquired after the separation, perhaps as a home for the departing spouse, is unlikely to be considered a matrimonial asset.