Court of Appeal Guidance on Inherited Wealth and Divorce | DFA Law Northampton Solicitors News

A recent decision of the Court of Appeal, involving the financial settlement in a ‘big money’ divorce, elucidates the criteria which the courts should apply in deciding financial settlements on divorce where there are considerable inherited assets, even when the sums involved are not as large as in the case in question.

The case concerned a couple who were divorced after 25 years of marriage. The Court ruled that the settlement payable by the husband, who had very considerable inherited wealth, should be reduced from £8 million to £7 million.

The decision was made after the factors listed below had been taken into account, the Court stressing that the objective in such cases is to achieve a just result.

• The fact that wealth was inherited and not earned justifies it being treated differently from wealth accumulated during the marriage;
• The nature of the inherited wealth must also be taken into account – an investment portfolio would not be treated in the same way as, for example, an ancestral home. This might be a good reason for departing from the equality principle which might otherwise apply;
• The duration of the marriage may be in point if it determines the time the wealth has been enjoyed by both parties; and
• The standard of living provided by the inherited wealth would also be in point, as would the extent to which it has been added to or depleted. In principle, the longer wealth has been enjoyed by both the parties to the marriage, the less fair it would be to ‘ring-fence’ it in a settlement.

There is, said the Court, no formula which applies: what constitutes a fair division of assets in each case will depend on the individual facts.

We can advise on all issues surrounding family break-up and guide you in the necessary negotiations over the division of assets.

Call us now on Northampton (01604) 609560 for more information
or email us at info@dfalaw.co.uk