It’s (sometimes) good to think about divorce

May 21, 2024

Getting married is one of the most important and exciting events in many people’s lives. The planning can start even before they’ve met ‘the one’.

This year I have the honour and pleasure of being a bridesmaid for one of my dearest friends. We met at university and bonded over a mutual love of Buffy the Vampire Slayer, good books and generally being geeky about studying law.  We are both now Partners in our respective practice areas and still enjoy getting together and talking about legal developments as well as the latest must read or binge worthy television show.  It has been a wonderful experience being involved in the planning of their special day including going to wedding dress appointments, shopping for bridesmaids dresses (and associated accessories) and, of course, helping to organise what was quite an epic hen party. An enormous amount of thought and preparation has gone into what is going to be an incredible wedding and a day that my friend, her husband-to-be and both their families and friends will treasure for the rest of their lives.

As a family lawyer, I spend a great deal of my time speaking to people who, despite best intentions and efforts, find themselves facing the end of their marriage. In contrast to the excitement and anticipation that is abundant in the lead up to a wedding and on the day itself, a divorce often comes with feelings of failure, uncertainty and mistrust.  It can be a most difficult and stressful experience and one which will have a lasting impact of the rest of their lives both emotionally and financially.

No one plans to get divorced, but sensible financial and legal advice, both in advance of tying the knot and as soon as possible once divorce is a possibility, can help to make the experience and the outcome better for all involved.  This is all the more important if there is any possibility of trust assets being involved and applies not just to those getting married or getting divorced, but to third parties such as the wider family, trustees, settlors and even other beneficiaries.

A good policy, regardless of if, how or when the spectre of divorce arises, is to start thinking about things as soon as possible and in fact - the earlier the better.

Pre-nuptial or post-nuptial agreements can be a great way of protecting family assets, including trust assets, as well as providing greater certainty on the outcome of any financial settlement on divorce and reducing the likelihood of having to spend considerable amounts of time and money arguing matters in court. This is great in theory but you cannot force someone to enter into such an agreement.  Pre-nuptial agreements will only be only be given weight in this country if they are entered into freely and with a full understanding of their terms. Unlike other jurisdictions, the terms also have to be considered fair. There is a lot to think about to ensure that an agreement has the best chance of being upheld and will provide as much protection as possible. Getting independent legal advice in plenty of time ahead of the big day can be crucial.

It may also be worth considering intervention even earlier by having a family policy or charter setting out the expectation that all family members will enter into a pre-nuptial agreement prior to marriage. Such a policy can help handle everyone’s expectations and diffuse difficult conversations with future spouses.

Getting advice from a family lawyer at the inception of a trust can also help ensure that any relevant documents are drafted with an understanding of how the trust could be viewed by the Family Court should any of the beneficiaries, current or future, be facing divorce proceedings.  This is important because, if a trust is considered to be ‘nuptial’ in nature, then not only could it be considered part of the assets available on divorce but the Family Court could make orders to vary it. This could be the case even if the relevant spouse is not a current beneficiary.

If divorce proceedings are a possibility then getting advice early on could be invaluable; again, this goes for all those who could be involved and not just the parties to the marriage. There is a high level of financial disclosure required in divorce proceedings which includes information in relation to trust assets. In some circumstances, the Family Court also has the power to order the trust itself provide documents and information directly. This works both ways, and if one party is arguing that a trust is relevant in divorce proceedings, then the trust should be served with the relevant application and can request copies of the parties’ financial disclosure.

In respect of offshore trusts, obtaining information can be more difficult but requests can be made and it may well be in the interests of the trust to cooperate. Getting early advice in respect of offshore trusts both in their local jurisdiction and in the UK is highly recommended.

There has been extensive litigation surrounding trusts on divorce over the years, some of my all-time favourite family law cases (yes I have those, I can still be geeky) deal with trust assets.  People have argued over everything from whether the trust is a sham, to whether a spouse is (or could be) a beneficiary, to what documentations should be provided and who else (if anyone) other than the parties should be joined to proceedings. Trusts are a useful and extensively used mechanism of managing family wealth both in this country and internationally.  We can therefore expect such matters to continue to arise and to be a feature of the cases being brought before the Family Court.  Whilst that can make for interesting case law, as an interested party, being involved in what could be expensive and high profile litigation is not desirable.

I understand that no one wants to think about divorce, especially when you are still thinking about wedding venues and seating arrangements, or if you are just welcoming the next generation of beneficiaries into the world.  But if thinking about divorce at the right time can help protect assets and avoid unnecessary disputes or contested proceedings in the future, then surely thinking about divorce can be a good thing, and if that is true, then thinking about divorce with a family lawyer would be even better.

Emma Nash, Family Lawyer & Partner, Rayden Solicitors

By Emma Nash | Family Lawyer and Partner | Rayden Solicitors