How to Divorce your Man but Keep your Assets

For this Expert Answers column, The Glass Hammer turned to Catherine Costley, Assistant Solicitor in the Family Department of Rooks Rider Solicitors, a top British law firm known for its expertise in Employment Law. Here, Catherine provides her expert opinion to Glass Hammer readers about how to protect your assets in the event of a divorce. Erin Abrams, a New York divorce attorney, also contributed to this article with respect to divorce law in the United States.

There’s a saying favored by women divorcing their husbands… “What’s mine is mine but what’s yours is mine too.” There’s a misconception that upon a divorce, most women are out to take their husbands for all the money they’ve got. Flowing from that is the misconception that the courts will actually endorse such thinking when it comes to financial settlements in a divorce. To the contrary, today more and more women are amassing wealth in their own right and instead of wanting to take her husband’s assets upon divorce, it is a case of preservation of the fruits of their labor.

Although this advice may come a little late for those of you reading this with a wedding band on your hand, the best place to start the preservation of your assets is with a prenuptial agreement.

It may be a hard and unromantic task, but it is sensible to discuss your respective financial positions openly with your future spouse before getting married. If you are coming into the marriage with your own wealth, agreeing what is to happen to those assets upon separation or divorce is the smartest thing to do. While prenuptial agreements are not legally enforceable in the UK they can be very valuable as they are persuasive in evidencing to the Judge your and your spouses intentions as to the division of assets on a divorce.

In the United States, prenuptial agreements are valid binding contracts that can be enforced by the court in the event of divorce, but specific laws governing divorce vary from state to state. Prenuptial agreements also provide useful evidence in a divorce as to which assets were amassed during the marriage (marital property) and which were pre-matrimonial assets (separate property). In the United States, this designation is important for determining which property is available for equitable distribution and which is considered separate property of each spouse. In the UK prenuptial Agreements are useful evidence upon a divorce as to which assets were amassed as a partnership during the marriage and which were matrimonial assets.

For the agreement to be of any use parties should receive independent legal advice on the agreement from lawyers of similar level of expertise and there should be complete and truthful disclosure of your financial positions prior to entering the agreement. There must not be any pressure placed on either party to enter the agreement. If you do decide to go ahead with it, do so well in advance of the wedding to avoid any assumption of duress. You should have at least two months between entering into the agreement and the wedding.

It may sound rather obvious, but it is necessary for the agreement to be fair. The courts will not enforce the agreement if, at the point at which they are asked to consider it, the terms of it are unfair for either of you or fail to reflect changes in the circumstances of your family or your financial situation. So, once the agreement is made you should review it regularly.

The agreement may include provisions relating to any children, but, in the UK, the court takes the best interests of children most seriously and will not be bound by the prenuptial agreements in this respect unless they are very generous.

To preserve your pre-matrimonial assets, you should ensure that they remain in your name and are not allowed to meld with assets accumulated during the course of the marriage.

If it becomes clear that your marriage has irretrievably broken down and you or your spouse wish to get a divorce, seek legal advice as soon as possible but don’t feel the need to take a defensive stance as a matter of course. It is important to choose a solicitor or attorney that you are comfortable with and who you believe will tailor their approach to suit your circumstances.

Often spouses will be able to agree between them how the assets should be divided and an attorney or solicitor is only needed to draft up the documents necessary to embody that agreement. One of the saddest things to see is a case where the parties bicker and argue over money while the matrimonial estate to be divided diminishes as they spend thousands on lawyers. Merryn Somerset Webb, editor of MoneyWeek and author of “Love is Not Enough” has devoted a whole chapter of her book to the business of divorce. Merryn writes:

“When you are caught up in a legal battle instructing your lawyer to fire off letter after letter to your ex-husband and to his lawyer, it’s easy to forget that the cost of every letter will come out of the final pot of cash that you both have to live off of.”

It is worth remembering that lawyers are not counselors or therapists. If you spend hours discussing problems with them other than just the legal issues, you are likely to spend far more money on your divorce. It is better to use your lawyer simply for dealing with legal issues and where possible help your own cause by responding promptly so they don’t have to chase you down, providing details as fully and as clearly as you can, and thinking through the issues you have so that you use your lawyer’s time (and therefore your money) efficiently.

If despite your best efforts you end up having to ask the court to help you settle financial disputes, British courts will primarily be looking to meet your needs from the matrimonial pot. Once the needs of both parties have been met, any surplus assets will be considered with a view towards compensation and sharing.

In the United Kingdom, this compensation element looks at whether one of you needs to compensate the other for sacrifices made in the marriage (such as giving up a glittering career to assist the family) and the sharing element turns on dividing the fruits of the marriage. This matrimonial pot will includes the assets of both you and your husband unless, having first met the needs of both parties, your lawyers can find a reason why the asset should be considered outside the matrimonial pot (e.g, by virtue of it being a pre-matrimonial asset which appears in a prenuptial agreement or an inheritance).

In the United States, divorce laws vary from state to state. In New York, for example, parties must prove grounds for their divorce, and cannot obtain a “no-fault” divorce or one based on irreconcilable differences, as they can in other states. Parties must prove adultery, abandonment, constructive abandonment, cruel and inhuman treatment, or divorce pursuant to a separation agreement. In New York, divorcing spouses are also entitled to seek ancillary relief, including child support, spousal support or maintenance, equitable distribution of marital assets. These issues, along with custody, visitation and parenting time with any minor children, must be resolved in order to finalize a divorce. As in the United Kingdom, spouses who have spent time at home raising children and taking care of a household while the other spouse earned money are entitled to credit for their contributions to the marital assets.

Whether you are getting divorced in the US or the UK, unfortunately there is no magic secret to financial settlements and no ratios that you can rely on as guidance or comfort. To keep your assets when divorcing your man, you will need to hope for the best and plan for the worst. By maintaining a high level of financial acumen and attention to detail when managing your assets in the context of marriage, you should be able to protect your earnings and make sure you get what you are entitled to.