The role of a short marriage in allocating assets following a divorce

Family law solicitor, Lauren Howard, discusses divorce settlements following a short marriage.

The allocation of assets following a divorce is often the most contested area of any divorce proceedings raising a number of questions with your appointed divorce lawyer; however a recent appeal court case against the equal division of assets is likely to further impact divorcing couples following a short marriage.

 The court will use a number of factors when determining how to best split assets amongst the two parties including both financial and non-financial considerations. Financial considerations include amongst others, the income and earning capacity, property ownership, the financial obligations that each of the parties to the marriage has, or is likely to have as well as the value of any benefit such as pensions which either party may lose a chance of acquiring due to the divorce.

 A number of non-financial considerations will also be factored into account including: the age of each of the parties and whether either of the parties suffers from any mental or physical disabilities.

 The duration of the marriage also plays a key role.

 A marriage of less than 5 years is generally considered to be a short marriage. Where a couples relationship is deemed to have been a short marriage and where there are no children involved, the family courts in England and Wales would typically consider a 50/50 split of assets, on a clean break basis, with the aim to restore the parties to their position prior to marriage.

 However, a recent appeal court hearing in the case of Mr and Mrs Sharp ruled against an equal split. In the instance of Mr and Mrs Sharp both were earning their own incomes, however during their relationship Mrs Sharp received £10.5 million in annual bonuses. The couple had where possible kept their finances separate and were divorcing after a short marriage with no children.

 Initially the court deemed that the principle of the equal division of assets should be applied, as it would be the starting point in most couples with similar circumstances. However, Mrs Sharp appealed the decision on the basis that the principle of equal sharing had in this instance been wrongly applied due to both parties keeping their finances separate where possible, having no children or dependents and the marriage being of short duration.

 The Court of Appeal ruled in Mrs Sharps favour with Lord Justice McFarlane concluding that the combination of factors (short marriage, no children, dual incomes, and separate finances) is sufficient to justify a departure from the equal sharing principle. Lord Justice McFarlane concluded that the £2.725 million pay out previously awarded to Mr Sharp, should be reduced to £2million.

The judgement of the above case raises the question, at what stage is someone entitled to share the wealth generated by their spouse?

 The case of Mr and Mrs Sharp illustrates that there are a number of complex factors that need to be reviewed when the Courts allocate assets and with good reason the outcome will be determined based on the individual circumstances of each case.

 The departure from the equal sharing principle in this instance highlights the importance of protecting your assets prior to the marriage through a pre-nuptial agreement. This enables the ring fencing of pre-acquired assets and inheritances and although not automatically binding they are now given considerable weight by the courts.

 To seek further advice regarding your divorce, speak to our specialist family lawyers at Holmes & Hills on 01376 320456 or 01787 275275.