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Are divorce courts unpredictable on pre-acquired assets?

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There has been some guidance this year from Judges sitting in the Family Courts on the distribution of pre marriage assets between divorcing couples. The Court must consider what assets each party brought to the marriage – property, wealth or business interests – and each case must be considered on its own merits.

The recent case of Jones v Jones, heard in the Court of Appeal this year, focused on a decision to treat an earning capacity as non-matrimonial. The couple had been married for almost ten years and separated in 2006 when the husband was 58 years old. Both parties possessed independent wealth when they got married – the wife was from a wealthy family and the husband had built up a thriving business. When the business was valued at the time of divorce there was a £10 million increase of its assets since the couple had been together. During financial settlement proceedings the business was sold for a net profit of £25 million.

The Judge made a ruling that as the business had been built up by the husband before Mr and Mrs Jones met, there should be no equality of entitlement to the asset. When the case went to appeal the Court recalculated the couple’s assets and judged that the husband’s earning capacity had been valued as it was at the beginning of the marriage, capitalised and treated as a non-matrimonial asset.

£16 million from the proceeds of the sale of the business was ruled by the Appeal Court to be a matrimonial asset and should be subject to a 50% division between the couple. Mrs Jones was awarded £8 million representing 32% of the total assets.

The Courts took a different approach in the earlier case of Robson v Robson, where the couples’ wealth was an inherited family estate from the husband’s father. Mrs. Robson’s share of the family wealth was limited to that which would meet her needs.

Experienced Family Executive, Dawn Chisholm, concludes by saying “Any increase in the value of assets during the marriage can be very important as to how the division of pre-acquired assets are treated for the purpose of divorce. It is always best to get specialist advice as every case will be considered on its own merits by the courts but it is important to present the information to the court in the best way possible. Contact us if you would like a free initial appointment to discuss your situation.”