Gifts and inherited assets
The law states that gifts between spouses are considered matrimonial assets and cannot be claimed back upon divorce, unless in the unlikely event that there is a written agreement stating otherwise. Gifts given to an individual by another relative or friend – a painting or piece of jewellery, for example – are not usually subject to the same rules.
Assets inherited during a marriage or civil partnership are generally considered to be part of the pot to be shared, but the court does tend to treat items such as heirlooms differently in order to preserve the clear intention that these remain in the family.
Again, however, any ringfencing of items does depend on financial need and whether this can be met through the division of matrimonial assets without including the above.
Pre-nuptial agreements
It may not be what clients want to hear, but no one can say with cast-iron certainty that their assets will be protected if they divorce. Every case is unique, dependent on the individual circumstances of both parties, and on occasion the court may be forced to make unpopular decisions in order to ensure that both parties’ financial needs are met.
Where assets include a collection, it may be possible for one party to buy the other out if finances allow, or it may be necessary to split it up or even sell it. The best way to safeguard such assets is with a pre-nuptial or post-nuptial agreement.
With the average marriage now lasting just shy of 12 years and half ending in divorce, according to a recent census, pre-nuptial agreements especially are increasingly becoming the norm.
A pre-nuptial agreement is a contract that is drawn up prior to a marriage or civil partnership that stipulates how all assets, and sometimes liabilities, will be divided if the relationship breaks down. This is best drafted by a professional to ensure it is as watertight as it can be and that there are no legal loopholes.
While it is hardly romantic to discuss your potential divorce before even walking down the aisle, a pre-nuptial agreement provides certainty and security, particularly for high-net-worth individuals who are starting out with substantial assets.
Unlike some other countries, they are not yet legally binding per se in the UK, but if they are fair and have been entered into properly then the court is highly likely to uphold them.
Amongst other things, both parties must provide full and frank disclosure of their financial position beforehand, they must have each taken independent legal advice, and the agreement must be witnessed and signed by both parties a minimum of 28 days before the marriage or civil partnership is due to take place.
