When couples decide to separate, one of the crucial issues is how to divide the assets. Victoria Strode, a solicitor at Mogers Drewett, considers some of the most frequently asked questions concerning asset protection.
Q. I brought additional assets to the marriage can I protect these?
In a long marriage, there is a presumption that assets should be divided equally. The Court’s primary concern is to ensure parties’ needs are adequately met, especially when there are children involved.
However, when there are surplus assets and all parties’ needs are sufficiently met, the Court can consider ‘ring-fencing’ certain property for one party. As such, if one person has received an inheritance or had significant assets prior to the marriage, these may be protected.
If you receive substantial assets during a marriage and wish to protect these in the future, you can draw up a post-nuptial agreement. This will document how property would be divided in the future if a separation were to occur and can be very persuasive for the Court.
Q. Will I have to share my pension?
Pensions are an asset available for division. Again, in long marriages the starting point for division will be 50/50. Often all pensions will be aggregated and there will be consideration of how to equalise capital lump sums as well as what the future income will be.
However, if you wish to protect your pension then it is possible to do so by offsetting this against other assets eg., agreeing your spouse will have more of the other capital assets rather than a share in your pension.
Q. How will the Court treat my business?
An interest in a business is relevant in matrimonial proceedings and is something that needs to be disclosed and ascertained. It may be necessary to value the business and/or the interest spouses have in it so the Court can consider the financial position of the couple as a whole.
There are many potential implications when it comes to a couple divorcing when there are business interests involved. These include potential tax liability, transfer of shares, ownership issues, liquidity, to name but a few.
If the business has, and continues to provide an income for the family, the Court will be reluctant to make an order which would result in a sale. There are however options to consider that would allow one spouse to retain their business interests. For example, if there is a lot of capital outside of the business this could be provided in return for one party retaining the business. Alternatively, it might be necessary for one spouse to pay a sum of money each month to the other in order to retain the business.
For further information please contact Mogers Drewett on 01749 342323.