How to protect assets during a divorce

There are cases where one party will deliberately try and dispose of assets to try and put them out of reach of the other party. An example might be transferring an asset to a friend or family member at a value significantly less than it is worth. If you have evidence that this is about to happen then your solicitor can approach the court on an urgent basis requesting an order preventing the disposal. This is known as a “freezing order”.

There is also a remedy for cases in which a disposal has already taken place where you can ask the court to set aside the transaction. This is called an “avoidance of disposition order”.

These applications can only be brought once divorce proceedings have started.

Applying for either of these orders is expensive so careful consideration will need to be given to the value of the asset and the costs likely to be incurred, because it may be a better strategy to ask the court to add-back the value of the asset disposed of to your spouse’s side of the balance sheet when asking the court to divide the assets. The best strategy will very much depend on the circumstances of your case and advice from a specialist family solicitor should be taken before doing anything.

In cases where the family home is solely owned by one spouse and there is a concern that they may sell, mortgage or remortgage it to frustrate the other spouse’s claim, it is advisable to have your solicitor register a matrimonial homes rights notice against the title at the Land Registry.

If you are planning to divorce you should discuss any concerns that you may have about your spouse’s plans to deal with assets in the first meeting so that if action needs to be taken, this can be done urgently.

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Prenuptial and Postnuptial Agreements

Nuptial Agreements can be pre-nuptial or post-nuptial agreements which are documents setting out how assets will be divided should a couple divorce.

They are becoming more widely accepted and are an important consideration where those planning to marry have valuable assets or where they expect to inherit in the future.

One thing we always get asked, understandably so, is whether these documents are binding. The short answer is no, they are not currently legally binding under English law however, they are likely to be upheld if they are properly prepared and executed. They are a factor that a Court will consider in the event a divorce, alongside other factors that the Court is obliged to consider when deciding how assets will be divided between the parties.

To give a nuptial agreement the best chance of being upheld, independent specialist matrimonial and family legal advice must be obtained by each party and there must be financial disclosure exchanged so that they both understand what rights they may be giving up should they enter into a nuptial agreement. The agreement itself needs to be “fair” and must not produce a result that would be obviously unfair on one party. The concept of fairness is elastic and there is no clear definition but what we do know is that one party must not be left in a position where he or she cannot meet his or her reasonable needs after a divorce.

The drafting of a nuptial agreement should not be overly complicated, and it is a document that needs to be clearly understood by the parties entering into it and by any Judge that may be asked to consider it in future.

We often find that where one or both parties are likely to benefit from a significant inheritance sometime in the future, the parent/s of that party will often encourage them to seek advice on a possible nuptial agreement so that the family wealth that is passed down is protected for future generations.
What should you do if you are thinking of getting married?
You should consult with a specialist family and matrimonial solicitor well in advance of the date of the marriage so that matters are not rushed, and terms of any agreement can be properly considered. We can make suggestions of suitable family solicitors for the other party to consult so that the matter can be dealt with constructively and collaboratively. My team and I have extensive experience in preparing nuptial agreements not only for our clients in the media and music industry, but for clients from all walks of life.

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How Does the Autumn Budget 2024 Impact on Divorce Proceedings?

The two main areas relevant to divorce law are the increases in capital gains tax (CGT) and the changes in which Carried Interest is taxed, which affects my clients in private equity.

CGT has increased with immediate effect from 10% to 18% for non and basic rate taxpayers and from 20% to 24% for higher and additional rate taxpayers. Entrepreneurs’ relief has increased to 14% for tax year 2025/6 and 18% for tax year 2026/7.

The change to the taxation of Carried Interest moves from a capital gains tax regime to income tax.

The other impact will be in relation to the increased school fees burden for those who have Court Orders ordering them to pay school fees. I expect we may see variation applications rise as the increase of 20%, with the introduction of VAT may be unaffordable for many.

There are also changes to inheritance tax and stamp duty land tax which although less relevant to divorce cases, constitute significant change.

I work with tax professionals who provide invaluable assistance in complex divorces and divorces where one or both parties are non-dom for tax purposes, which will also change with the recent Budget.

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What is a Financial Dispute Resolution Hearing (FDR) in a divorce?

Usually, the FDR is the second court hearing once you have issued a court application to determine financial matters on divorce. This is a ‘without prejudice’ opportunity designed to encourage the parties to reach a settlement. What is discussed at the FDR cannot be referred to at a subsequent final hearing, so parties are able to negotiate freely. The FDR judge cannot deal with the matter at the final hearing.

Before the FDR the parties must have completed the disclosure and computation part of their case so that it is clear what is available to be divided between them. Without Prejudice offers to settle are usually exchanged in the two weeks before the hearing so that each party comes to the hearing with a good idea of what the other one wants from a settlement.

The judge will give a non-binding indication of what would constitute a fair settlement and encourage the parties to make compromises to reach a final agreement. These indications can be very persuasive in getting the parties to reach finality.

Court based FDRs are often frustrating as there is usually very limited time available to the judge who often has 4 or 5 cases to deal with on any one day. He/she often has no time to read the papers and can therefore provide only limited input and assistance to the parties.

For this reason, we have seen an increase in private FDRs and Early Neutral Evaluations (ENE) where the parties agree to pay a private judge to hear their case and give an opinion. Private evaluators are usually chosen from the ranks of barristers and retired judges who can devote as much time as the parties require to assist in settlement negotiations. They are usually held in a more comfortable and less intimidating environment than the family court and, in my experience, are more likely to result in settlement, making them worth the extra cost paid for the private evaluator’s time.

As the pressure on court time increases I expect these alternatives to become more popular and I have already seen a marked increase in my own practice.

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Parental Alienation

Parental alienation cases are some of the most difficult for family solicitors to deal with. The consequences of such cases are far-reaching for both the child and parents involved and require a careful approach from an experienced legal team.

Parental alienation is defined as the situation where a child’s hostility towards one parent is not justified and is as a result of the psychological manipulation by the other parent. This manipulation can be deliberate and conscious, or unintended. 

Cases coming before the courts involve both mothers and fathers alienating their children. 

In those cases, involving true alienation, the child may refuse to spend time with their other parent and often with that parent’s wider family as well. The refusal will appear to be extreme and not based on ascertainable reasons. 

If one parent believes there has been parental alienation of their child then the situation needs to be brought before a court quickly, as if not the child’s views are likely to become fixed and the chance of re-establishing a relationship with the alienated parent will diminish over time. 

Cases brought to court where a parent suspects parental alienation is present should be listed for a Fact-Finding hearing as soon as possible. This hearing will determine whether parental alienation is present after the court has heard all the relevant evidence. Only after the factual context is clear can a welfare report from a social worker be properly undertaken. 

One of the factors that a social worker advising the court needs to consider when preparing a welfare report is the ascertainable wishes and feelings of the child, considered in the light of his/her age, and their understanding. In parental alienation cases this can be difficult as it is not going to help to report what the child is saying, without enquiring in more depth about the reasons for the child stating that they do not want to see the other parent. 

What happens if the court determines that the child should see their other parent, and that child remains resistant or simply refuses to comply with the order. The practical plans that are put in place will likely determine whether the order of the court can be successfully implemented. 

There are cases in which an older child, after his principal home was transferred from his mother to his father, simply kept running away. There are examples where the child has become so extremely distressed at the attempted handover,  that it could not proceed. 

There is a limit to what the court can do when the alienation becomes entrenched. Sometimes the transition from one home to the other can be managed by professionals who have been involved in the case, such as the child psychologist or social worker, and this will all require detailed planning. 

It is widely accepted that children who have been subjected to parental alienation can develop emotional and psychological problems lasting into their adulthood. It is important for children to be able to enjoy healthy relationships with both their parents. Sadly, despite the best efforts of the court and other professionals involved, this is not always possible. 

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Narcissistic abuse in divorce cases

I meet many people in my line of work who find themselves in a very intimidating situation (and one that is often not acknowledged) when they attempt to separate from a partner who they believe to be narcissistic and at whose hands they have experienced coercive and controlling behaviour. 

Often when I first meet these clients they tell me that they have been doing a lot of research and that they have realised that their ex-partner is a narcissist. They then proceed to ‘prepare’ me for what is to come, explaining that although outwardly charming and intelligent, their ex will try to manipulate everyone involved in the court process. They’ll often want to put their minds at rest and be convinced that I will be strong enough to ‘fight their corner’. Often people take this view because they feel angry and bewildered at the actions of their ex-partner as soon as they indicate that they wish to separate, and they naturally want to ascribe a label that accurately describes that behaviour. 

There are other clients who I identify early on as having experienced coercive and controlling behaviour at the hands of their partner, and these clients are often in a very delicate state. ‘Coercive control’ is now a criminal offence, which is certainly a step in the right direction in recognising the damage that this behaviour can do. The ongoing problem is that so few people appear to understand what it means, and so it is very often ignored. 

I find myself reflecting that because the label of ‘narcissist’ is bandied about too often, when it is actually applicable and needs to be carefully and sensitively dealt with, it is often dismissed out of hand. 

Narcissist abuse is a form of thought control. The abuser uses specific language designed to manipulate the person on the receiving end. Quite often the abuser uses words to; get their partner to question their own sanity (known as ‘gaslighting’), mistrust those who have historically supported them, make them feel worthless and abandoned, and the list goes on. They are usually not physically violent but instead use coercive control and emotional manipulation to hurt those around them instead. 

Therapists and counsellors say they can often identify people who have been subjected to narcissistic abuse early on, as these people tend to be entirely focussed on their own perceived failures and inadequacies. This perception can be particularly acute in divorce and separation situations. If I suspect that my client has been on the receiving end of narcissistic abuse, I know that they will need a lot of support through the process. Often, these clients will be professional high achieving women (although both women and men can be abusers). Generally, these women do not view themselves as ‘victims’, but they have often nearly depleted their inner resources just to reach the stage of making the decision to leave their partner. They feel overwhelmed by the process and the decisions required of them. True narcissists tend to fight every issue. They have an overriding desire to win and want to punish their ex-partner, often using their children as weapons, as they view this as the only remaining way of exercising control after separation. 

The narcissist may ensure that their ex-partner has insufficient money to instruct a solicitor and may bring endless applications to exhaust their ex-partner both emotionally and financially. There are remedies for clients in this position and we are sometimes able to obtain an order for costs so that this particular area of vulnerability is neutralised. 

Alternative forms of dispute resolution such as mediation and collaborative law may not work in these cases. The abuser may be very keen to pursue those processes rather than a litigation-based process, as they feel this would enable them to continue their hold over their ex-partner. Cases in which coercive control and controlling behaviour are a feature need to be handled very firmly and proactively. 

Thankfully, the existence of narcissist abuse is starting to be taken seriously and there is support available to help clients during  difficult matrimonial proceedings. 

If you would like to hear more about the issues raised in this article, please contact Louise Barretto on (0)20 7439 8692.

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Court Considers Coercive and Controlling Behaviour

In a case that caused quite a stir in legal circles on Twitter last week the court examines, amongst other things, allegations of coercive and controlling behaviour, and the effect that these behaviours may have had on the validity of a postnuptial agreement.  

The case of Traharne v Limb considered many legal issues, but of interest to me is the analysis that the court gave to the wife’s allegations of the husband’s coercive and controlling behaviour. These allegations are set out in paragraph 21 of the published version of the judgement and the wife sought findings as to the coercive and controlling behaviour she says she was subjected to by the husband as follows:

  1. Verbal abuse, shouting and screaming including threats of physical violence;
  2. Denigration, belittling and demeaning the wife to make her feel subordinate;
  3. Financial control to make the wife feel dependent on the husband;
  4. Ignoring, sulking and withdrawing affection if the wife refused to do as she was instructed, including to have sexual intercourse with the husband;
  5. The behaviour described at iv) above was then followed by showering the wife with affection and gifts when she did bend to his will (known as ‘love bombing’);
  6. Gaslighting her: refusing to acknowledge instances of physical violence or his coercive and controlling behaviour and suggesting that any concerns expressed by the wife were made-up so as to undermine wife’s own understanding of the abuse and to erode her sense of lived reality and personal autonomy, resulting in a distorted sense of reality according to him;
  7. Controlling the running of the family home, regulating her everyday behaviour and coercing  the wife into how exactly to run the family home and limiting the wife’s ability to live freely in the home;
  8. Control of the wife’s life and time outside the home including persistent requests for the wife to allow the respondent to place a tracker on her phone, not allowing her to have hobbies or attend clubs (despite him doing so) as he said this took time away from him, and not allowing her to do anything which she had not sought his prior approval for by noting it on a shared calendar in the kitchen of the family home;
  9. Restricting the wife’s contact with her wider support network, limiting or controlling interactions, telling the wife that her family and friends didn’t care about her, telling the wife that she must not discuss their relationship with any third parties and restricting the wife’s access to her mobile phone;
  10. Discouraging the wife from attending her church in order to restrict her time away from the husband, limit her independence and isolate her from a source of support;
  11. Pressuring the wife to drink alcohol with him, even when she indicated that she did not wish to, and putting pressure on the wife to not eat her supper until he was also ready to do so, regardless of how late he returned home from work or how hungry she was;
  12. Restricting the wife’s ability to travel, especially to visit her family and friends by discouraging her from doing so and then, if she did, ignoring her or criticising her for doing so on her return resulting in her feeling intimidated, downtrodden and low in confidence;
  13. Driving recklessly with the aim of scaring and intimidating the wife if she disagreed with him or made mistake when giving the respondent directions; and
  14. The above behaviours were all exacerbated by the husband’s heavy drinking.

The husband denied the allegations. 

The wife’s position was that the husband’s behaviour as set out above meant that she was unable freely to enter into the postnuptial agreement. Her position was that the agreement should be afforded no effect. She did present an alternative argument, which is beyond the scope of this article. 

In this case, a medical expert was appointed as a single joint expert to give an opinion on:

  1. As to whether the wife was subjected to coercive and controlling behaviour in 2018 during the period in which the postnuptial agreement was negotiated and signed; and if so
  2. What the impact of such behaviour would likely have been on the wife’s psychological state, specifically (but not limited to) her mental freedom to enter in freely into that agreement.

It is established law that any standard vitiating factors such as duress, fraud or misrepresentation will negate any effect such an agreement might otherwise have. But unconscionable conduct such as undue pressure (falling short of duress) will also be likely to eliminate the weight to be attached to the agreement, and other unworthy conduct, such as exploitation of a dominant position to secure an unfair advantage, would reduce or eliminate it – comments of Ormrod L.J. in the case of Edgar v Edgar. 

In the present case, the court viewed Ormrod L.J’s words relevant and that they had stood the test of time. Coercive and controlling behaviour would plainly be an example of undue pressure, exploitation of a dominant position or of relevant conduct, said the court. 

The court felt it had to look at the allegations in a broad, holistic manner but could not avoid looking at them individually to determine their veracity. The court reached its findings after examining the allegations of coercive and controlling behaviour and some of them are quoted below:

‘The clear impression that I have is that this was a relationship that at times was tempestuous and that H would on occasions lose his temper. W says that they had major arguments about once a month. I do not accept that W was in fear of physical harm.’

In regard to wife’s allegation that the husband controlled her daily life, she had accepted that he never stopped her from doing what she wanted, and when pressed she couldn’t give an example of an activity that he stopped her from doing but said that he frowned on them. The Judge found nothing controlling in the husband’s request that the wife mark on the big calendar hanging in the kitchen when she was going to be out, as did the husband. The Judge felt that this was not him being controlling of her or requiring his approval, but simply enabled each to know when the other was to be in or out. 

There was no evidence of husband restricting the wife’s contact with family or friends, or seeking to keep tabs on her. 

The case contained a lot of evidence about the various examples that the wife gave and the husband’s response. I don’t intend to go into all of these in this article, but ultimately the court found that the husband’s behaviour could not objectively be described as coercive or controlling, or that it contributed to the wife entering into the postnuptial agreement. What caused some controversy was the following comment by the Judge:

‘I very much regret that so much energy has been devoted to exploring this subject. The emotional and financial consequences on the parties has been considerable. It has also been entirely unnecessary.’

I have written before on coercive and controlling behaviour, and it seems it is now only being afforded the attention and examination it deserves. 

Should you have any questions about this article, or if you wish to speak to a member of our family team about your situation, you may call us on 020 7439 8692 and ask to speak to a member of our family team. 

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How does domestic abuse show itself in financial proceedings on divorce?

When divorcing a partner who has been abusive throughout the relationship, it is often thought that the abuser continues his or her behaviour during financial proceedings, often making finalisation of matters on divorce a very difficult process.

Cases that I have been involved in have shown that examples of this continued abuse can be:

  1. A refusal to comply with court orders
  2. A refusal to negotiate at all – which is required by the court
  3. A refusal to provide financial disclosure
  4. Deliberately delaying proceedings
  5. Insisting that mediation is a suitable process
  6. Making efforts to exhaust their spouse’s financial resources by prolonging, delaying or being obstructive during the court process.

Although ‘conduct’ has to be significant and serious for the court to take it into account as a separate factor on divorce, the court does need to have ‘regard to all the circumstances of the case’ when exercising its wide discretion in deciding a case.

Because of the case management process, it is difficult for the person on the receiving end of the abuse to make it clear to the court that the other party has been abusive, when at the early stages of proceedings everything is dealt with on paper and no detailed evidence is given to the court. Many people, understandably, want the Judge in their case to be aware of the behaviour of their ex-partner at each hearing. This leads to frustration during the early stages, however a solicitor with experience of dealing with these kinds of behaviours will be able to conduct the case in such a way that it takes full account of the delaying and obstructive behaviour of the other party, getting before a Judge for a decision as soon as possible.

If you would like to discuss your own situation in confidence, please contact Louise Barretto on telephone 020 7439 8692 or by email: louise.barretto@russells.co.uk

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Divorce Leave Scheme



View from a Family Solicitor

I’ve been consuming with great enthusiasm the recent media coverage of a voluntary scheme which sees the family friendly policies of several large employers being amended to allow employees with children and who are separating from their partner, to have extra leave and flexible working. There is also a suggestion that they will be offered help to source and access support services by their employers.

Having seen first-hand the distressing effects separation/divorce have on people, I wholeheartedly support these initiatives. It was announced in Parliament that the following employers have pledged to take part:- Tesco, Asda, PWC, Metro Bank and Unilever.

I have been helping people through separation and divorce for over 30 years, and the upheaval and uncertainty that is involved by both parents and their children is one common thread that runs through these cases. Some are more impacted than others, but all would undoubtedly benefit from having flexibility and understanding in their place of work, while they are trying to adapt to a new way of life.

Working out where each parent is going to live post separation/divorce, when the children will spend time with each parent, whether the children will need to move schools, and adjusting family budgets, can be overwhelming for the most resilient parent, never mind having to balance life changing events with the pressure of performing at work, whilst trying to carve out time to produce all the financial disclosure and information required and respond to requests from their family solicitor.

There may also be occasions where the parents are required to attend mediation sessions or court hearings, which on their own can be stressful for the participants.

A large part of my work consists of providing the support that my clients need throughout their separation/divorce process, and this is not confined to the legal aspects. There is good reason why divorce is considered one of life’s most stressful events, after losing a loved one, and along with losing a job and moving. People need to be supported during this time.

Nicola, my colleague specialising in Employment Law gives her views on this initiative below.

If you would like to discuss any of the issues raised in this article kindly contact Louise Barretto of the Russells’ Family Team to discuss in confidence.

View from an Employment Solicitor

Family breakdown can have a big impact on work life and prospects. In a survey of 200 workers conducted by the Positive Parenting Alliance to support the Divorce Leave scheme, the vast majority (90%) said their work performance was impacted when they went through a divorce, and 95% said their mental health at work suffered.

However, at present, very few employers have specific policies to cover employees going through a divorce or separation. Any requests to take time off to deal with the many issues arising from a separation/divorce would need to be taken as annual leave (or potentially as sick leave in some circumstances).

It then stands to reason, and feels like the “right thing”, for employers to recognise separation and divorce as potentially huge life events, which deserve recognition and support.

As Louise has mentioned above, certain employers have already pledged their support to the Divorce Leave Scheme. Those employers will add to their family friendly policies so that separation/divorce is given similar status to compassionate leave or serious illness. Employees will then be entitled to take “divorce leave” from work, request flexible working and access to support services if needed.

However, this process will not be without complexity. Businesses will need to decide the details. For example, will divorce leave will be paid or unpaid? How long should it last? Should extra time off be provided to divorcing parents with children? How will eligibility be determined? The downsides, then, are the administrative and financial burdens for the employer. Employers may also struggle to resource an extended period of divorce leave, particularly given the  current difficulties of recruiting and retaining staff in many industries. These difficulties will need to be balanced against the benefits for workplace culture and employee wellbeing.

The Divorce Leave Scheme is voluntary and there is no indication that the Government intends to make it mandatory. Whilst many employers may feel that the benefits outweigh the disadvantages, others may decide that a more flexible, case-by-case approach (relying on their existing family-friendly policies) is more appropriate for their organisation at present. Either way, the recent media coverage should serve to highlight to employers the importance of recognising divorce and separation as hugely significant moments in their employees’ work and personal lives.

Please contact Nicola Tager of Russells’ Employment Team to discuss further.

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Compensation For Career Sacrifice On Divorce

Often when married couples start a family there will need to be a discussion about whose career will take a backseat, especially where both parents have been working in lucrative roles. Whilst they may have supportive childcare there is usually one parent who finds they need more flexibility with their work and, with that flexibility may come a different career trajectory and consequent change in earnings.

Our family courts have, perhaps understandably, been reluctant to engage with the debate sometimes raised in subsequent divorce proceedings.

Even if there is clear evidence that one parent has forfeited a lucrative career to be the main homemaker, how should a court go about quantifying the compensation element?

This explains why there are so few reported cases dealing with compensation in this context. There has been a small trickle since the cases of Miller and McFarlane in 2006.

In  Waggott v Waggott 2018, the Court of Appeal proposed that the test for applying the compensation principle is that the court should determine, on a balance of probabilities, that the applicant’s career would have resulted in them having resources greater than those which they would be awarded under the needs or sharing principles. The court should then determine whether, and if so how, compensation should be reflected to ensure fairness to both parties. In Waggott, the wife’s claim for compensation was rejected because her retained award under the needs principle would be greater than a lost net income of no more than about £64,000 per year.

This topic was raised again in RC v JC in 2020 and in TM v KM in 2022.

In RC v JC the wife was awarded £400,000 in compensation for giving up her career as a city solicitor to raise the family.

The judge was clear that this was an exceptional case and fact specific and that the judgment should not be viewed as a ‘green light’ to raise compensation claims. The judge was of the view that in this case the wife had shown a clear path to partnership before she gave up her career.

In TM v KM the judge found that it was an exceptional case in which a discrete compensation award was appropriate in favour of the wife who had given up her career as an investment banker at a time when her earnings were at a level similar to the husband’s. The result was that she received a higher maintenance award pegged at the top end of the range, rather than an additional capital payment.

Conclusion

It remains difficult to successfully argue a separate and distinct compensation claim on behalf of a party in divorce proceedings, because any element of compensation will usually be subsumed in the needs and/or sharing principles applied.

If you would like to discuss any of the issues raised in this article kindly contact Louise Barretto of the Russells’ family team to discuss in confidence.

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