A UK Court case has shown just how important it is to clarify exactly who owns what when it comes to dividing up financial assets during a divorce, especially when substantial amounts of money are involved.
A man has won the right to keep a collection of 35 classic cars with an estimated value of around £20million, financial assets that his estranged wife claimed should have been transferred to her.
However, the Judge found in the man’s favour, agreeing that the collection of vintage cars was in fact owned by a company to which the man had links, and were not actually his own personal assets. Therefore, they could not be considered to be part of the settlement.
In this divorce case the wife will get no part of the classic car collection, despite having insisted that ownership of the multi-million pound collection should have been transferred to her as part of the divorce settlement.
Increase in Pre-Nuptial Agreements
In this case the divorce money matters being contested were substantial, but in any relationship the value of the financial assets of each partner need to be considered if things go wrong. This is why pre-nuptial agreements have become more popular in England and Wales and partly explains the increase in demand we have seen for both pre and post-nuptial agreements at Co-op Legal Services.
One important aspect of the example is that the woman was denied access to the collection of vintage cars because the Judge was satisfied that they belonged not to the woman’s husband, but to a company that he had connections to. So has he effectively sidestepped the usual method of dividing up assets in a divorce case by signing over the collection to a third party, whilst still retaining effective control over the collection? If so, then it’s a smart move that was probably premeditated and designed to prevent his (soon-to-be ex) wife from laying claim to them. Immoral? Maybe. Illegal? Certainly not.
Disclosed vs Undisclosed Assets
This divorce case is a little unusual in the fact that it concerns assets that were known about, rather than a contest over ‘undisclosed’ assets. Even if the man had drawn up a pre-nup with his wife, he is not legally required to declare every asset or to include them in the agreement. However, perhaps in this instance a pre-nup that did include the classic car collection could have prevented a costly and (by all accounts) fairly acrimonious confrontation in the courts.
Because the cars had been signed over to become assets of a third party (in this instance a company rather than an individual), legally this put them out of reach of the wife’s claim, regardless of whether she believed she was entitled to ownership or not.
Protecting Financial Assets
Signing a collection of classic cars over to someone else to prevent a partner laying claim to them during a divorce case seems to be quite an extreme measure to take, but for such a valuable asset it has obviously worked in this instance. However, the man may now find it more difficult to regain control of this asset, and if he does there is always the possibility that as soon as he does take back control his ex-wife may put in a retrospective claim for half of their value.
So if you don’t want to sign over your financial assets to a third party, and you haven’t drawn up a pre-nup agreement then the only way to protect them in the event of a divorce claim is to employ an experienced legal expert.
At Co-op Legal Services we recognise just how challenging complex separations can be, and we’ve helped thousands of couples come to an amicable arrangement that is both fair and just.
For initial divorce advice call our expert Divorce Solicitors on 03306069626 or contact us online and we will call you.