A wife has reportedly stated that her husband ‘won the lottery’ after he had an affair and was then awarded half the assets by a divorce Court.
Julie Arnold was married to Robin Sharp for 4 years. They divorced after Mr Sharp had an affair. A high Court judge awarded Mr Sharp half of the couple’s 5.45 million capital pot, so £2,725,000. Ms Arnold appealed against the decision. The Court of Appeal has reduced the award to the husband to 2 million.
Ms Arnold has called for law reform because, on her case, the majority of the family assets of nearly 5.5 million came about as a result of the 10 million she received in income bonuses during their short marriage, during which time they kept their finances separate.
The Court of Appeal decision to reduce the payment to the husband to less than half the capital pot is being hailed as a landmark judgement. In recent years, when deciding how to split money on divorce, the Court has started from the premise that assets generated during a short marriage, either from income, bonuses or growth in capital, should be shared between a husband and wife equally. Assets bought before the marriage or inherited are treated differently by the divorce Court, depending on individual family circumstances.
Is Ms Arnold right? Did her husband win the lottery? Some would say that getting married is a lottery ticket in itself. If the couple hadn’t got married Mr Sharp would have had no financial claims over Ms Arnold’s bonuses. Resolution, the national organisation of family lawyers, is calling for a change in law so there isn’t such a lottery in financial outcome depending on whether a couple are in a committed cohabiting relationship or married.
As a specialist family lawyer , advising on divorce and financial settlements , I would also say that leaving the divorce Court to decide on how assets are divided is leaving both a husband and wife open to the lottery of the Court decision. Could Ms Arnold and Mr Sharp have avoided this? If they had signed a prenup agreement prior to their marriage then the likelihood is that the husband’s financial claim would not have come to Court as the husband and wife’s would have probably reached an agreed Financial Court Order, either in the same or similar terms to their prenup agreement, and then asked the judge to confirm their agreement in a financial Court document. That is because the husband and wife would have known that any divorce Court would have been highly influenced by the contents of the prenup agreement and so the lottery of a financial Court case and the costs wouldn’t have been justified.
A prenup agreement or even a post nuptial agreement (entered into after the marriage and when Ms Arnold was getting large bonus payments and suspicious about whether her husband was having an affair) would have been a sensible option for the couple as they had entered marriage at a later stage in their lives, didn’t have children together, and had elected to keep their finances separate.
So is Ms Arnold right in calling for divorce reform to amend the current family law? Yes, laws do need to be reviewed but there is a lot that couples can currently do to protect themselves to stop or limit the lottery of who decides who gets what when assets are divided on divorce . As a divorce lawyer I now spend the majority of my professional time preparing bespoke prenup and post nuptial agreements to keep couples in control of how their wealth is split and to avoid either one of them thinking that they have had no control over their marriage and money.
For a chat about drawing up a prenup or post nuptial agreement or for advice about any aspect of divorce law or financial claims give me a call on +44 (0) 1477 464020 or contact me by email at [email protected]