Guide to High Net Worth Divorce

In high net worth divorce, assets are often held in complex financial products and arrangements, with wealth structured for succession and tax efficiency. High value divorces may involve business valuations, hereditary land, international trusts, offshore investments, jurisdiction disputes, and additional privacy concerns. High net worth divorces are complicated and will require specialist advice.

Hawkins Family Law are recognised as leading divorce lawyers in the UK. With offices in Central London, Buckinghamshire, Oxfordshire and Hertfordshire, we are recommended as a top-tier firm in The Legal 500, recommended in the Spear’s Family Law Index for the best family lawyers for high-net-worth clients, and listed by Wiselaw among the leading divorce solicitors and family lawyers in the UK, regularly advising clients involved in complex, high net worth divorce disputes.

There is no precise definition of a high net worth individual (HNWI). According to the UK’s Financial Conduct Authority (FCA), a high net worth mortgage customer is someone who either earns more than £300,000 per annum or has net assets of more than £3million.

Often for the purposes of specialist family law solicitors, it will be regarded as a high net worth divorce when the family’s net assets exceed £1million or the combined income of the separating parties is more than £150,000. However, there is no singular definition of a high net worth divorce and in many cases the complexity of the asset structures involved are more of a guide than any pure monetary value.

Those disputes before the courts involving total assets exceeding £15 million or having a party with income exceeding £1 million will be considered for automatic transfer to the High Court, but even this does not guarantee the “elevation” from the regional Financial Remedy Court.

The applicable statute (Matrimonial Causes Act 1973) applies to those cases of high value and more modest asset cases alike. The parties still need to go through the disclosure and computation phase, in addition to the distribution phase for settlement.

Those cases of particularly high value of complexity will likely encounter greater consideration of one or more of the s.25 criteria such as standard of living through the marriage, contributions etc or provision of sharing of surplus assets, whereas it is more common to consider issues of financial need in modest asset cases.

Additionally, it is more likely that higher value and complex cases will involve the requirement of specialist expert evidence to help the parties to consider settlement. This evidence may include business valuations, tax advice or advice from lawyers in other jurisdictions in support of lawyers here in the UK.

Irrespective of the level of wealth involved in a case, one of the best ways to protect pre-marital wealth in the event of divorce is by way of a nuptial agreement. These agreements can be complex and it is imperative that they are crafted carefully, again with the additional benefit of other specialist to ensure that wealth is protected to the greatest extent possible by the law.

The court has the ability to make orders relating to the payment of school fees and maintenance, including “top up” maintenance for those individuals whose annual income exceeds £156,000 p/a, where these matters are in dispute. For high net worth cases, the cost of these expenses are often comfortably incurred as part of the parties’ settlement considerations.

Issues relating to contact and living arrangements for high net worth individuals can offer their own challenges. Contact arrangements for children in boarding school and arrangements for parents that live in separate jurisdictions all offer their own challenges. All court based decisions are ultimately made with due consideration being given to the criteria set out in the “welfare checklist”, with the court basing any decision on the children’s best interests.

The family justice system is increasingly attuned to increasing calls for greater transparency in court proceedings, designed to shine a light on the court’s decision-making processes to ensure greater consistency of outcomes for court participants. Beginning earlier this year, a year long pilot scheme operating from four regional courts allows accredited journalists to report on cases, subject to strict rules on anonymity. Previously, although journalists have been able to attend hearings that are closed to the public, they have rarely done so because they could only report on a case if the presiding judge agreed to vary the automatic reporting restrictions in place.

There is a clear cultural shift towards allowing greater transparency on family cases, which understandably unnerves many individuals – whether based on concerns over personal privacy, the privacy of their children, but also commercial sensitivity of matters being openly reported. As such, it is common for those involved in high net worth disputes to rely upon arbitration as a preferred dispute resolution method. Arbitration is not subject to the same reporting regulations and allows for all disclosure and arbitral proceedings to remain confidential between the parties and lawyers. For many high net worth individuals, it is often imperative that matters of such sensitivity are conducted away from the limelight and arbitration is a valuable method to maintain privacy.

Whether based on pure monetary value or by virtue of the sheer complexity of assets in a dispute, it is crucial that specialist legal advice is obtained at the outset of a case. Meeting with your lawyer, who will work with you and any additional experts required throughout your dispute, to provide you with a fully supportive team is essential in securing the best outcome upon separation.

Ready to take the next step? As leading high net worth divorce lawyers, Hawkins Family Law can advise and guide you from the moment we start working with you. As well as having offices in Central London – just five minutes from St Paul’s Cathedral – Buckinghamshire, Oxfordshire and Hertfordshire, we can also speak to you over secure video call. Get in touch – we’re here to help. Talk to us in confidence and find out where you stand.

This article is intended for the use of our clients and other interested parties. The information contained in it reflects the author’s view and is believed to be correct at the date of publication. However, it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional legal advice.