Inherited and pre-marital assets

Following the move towards family Courts achieving fairness since the 2000 case of White v White, there has been much debate as to how the family Courts should deal with inherited and pre-marital assets on divorce. The issue has been the subject of regular judicial scrutiny, most recently the Court of Appeal decisions in Robson v Robson, Jones v Jones and K v L.

A spouse who has inherited wealth (such as a landed estate or shares in a family business) or generated valuable business assets before a marriage will often want to protect those assets from claims by their spouse.

The general rule is that all assets in which the parties have an interest of whatever nature are taken into account on divorce. However, inherited wealth will usually be shared only to the extent necessary to meet the claimant spouse's needs. That principle may vary depending on how the inherited assets have been used during the marriage. For example, in the case of Robson, the husband was required to sell part of the family estate in order to meet his wife's financial claims. An important factor in that case was that he and the wife had used the family estate to meet their living expenses in a way that also jeopardised the long-term financial viability of the estate.

The approach taken by the Court of Appeal in Jones to business assets acquired before a marriage was to share them only to the extent that they have increased in value during the marriage. This approach gives rise to difficult valuation and evidential questions such as how much the value has increased and to whose efforts or what other factors such an increase is attributable.

As with all financial proceedings on divorce, litigants navigating the Court's discretion to achieve fairness require careful guidance based on specialist advice, but especially so in this area where the law is so unclear. Our expert lawyers from our Landed Estates and Wealth Planning Teams are able to provide support to the Family Law team, making us ideally placed to provide tailored advice and bespoke solutions in these complex cases.
 

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