On Thursday the Court of Appeal ruled that a wife of 23 years, Karen Hart, should get 37% of the family assets. She had argued that she should get half the family wealth given she and her husband had been married for a long time and had children together. She therefore appealed against the first judge’s order and on Thursday she lost her appeal case.
Usually when a couple have been married for a long period of time the starting point should be an equal division of family wealth so by Mrs Hart’s calculations she should have received 5 million and not the 3.5 million that she was awarded . However equal division is just the start point, the award to a husband or wife can be higher or lower. The Court will consider a whole range of factors, referred to by family lawyers as the ‘section 25 criteria’, and the Court then makes a decision on what it thinks is a fair split.
John Hart argued that there should be an unequal split of money as he had money and property prior to the marriage whereas Mrs Hart didn’t. The Court will usually take less account of whether assets were acquired before the marriage if the marriage is of long duration. In today’s age a marriage of 23 years is classed as very long.
The Court of Appeal concluded that as Mr Hart was already a multimillionaire from a property empire when the couple met in the 1980’s that he should get more than 50% of the family wealth. The Court said that the original award of 3.5 million to Mrs Hart met her ‘reasonable needs’.
If Mr and Mrs Hart had not been worth nearly 10 million the result could have been very different as where assets are more modest a judge can award more than half the assets to the economically weaker spouse in order to meet their greater financial needs, even if those assets were generated by the other spouse prior to the marriage.
So to the heart of the matter, where does this decision leave spouses who are trying to sort out a financial settlement on divorce? Early specialist family law advice is vital so the section 25 factors can be considered and the percentage range of financial awards can be discussed. This decision shows that there it isn’t always easy to judge what a Court will conclude is fair and that it is important to weigh up the costs of an appeal.
For those starting out on relationships this decision highlights just how important a prenup agreement is. If Mr Hart, who was a wealthy business man when he met Mrs Hart, 20 years his junior, had asked her to enter into a prenup agreement much of the legal debate and legal costs could have been avoided. For lawyers preparing prenup agreements the Hart case emphasises the importance of recording who owns what when drawing up a prenup agreement and defining how ‘reasonable needs’ will be met on divorce.
For specialist family law advice on prenup agreements or the division of assets on divorce please contact me on 01625 728012 or send me an e-mail on [email protected]