There are various ways that you can protect your assets from a divorce in the UK, including through a post-nuptial or prenuptial agreement, trust or divorce financial settlement. There are two main types of assets to consider following divorce: matrimonial and non-matrimonial assets. Non-matrimonial assets, also referred to as ‘pre-marital’ assets, may include any property and/or possessions acquired before the marriage, following separation, or received in the form of inheritance. Matrimonial (or marital) assets are those acquired during the marriage as a married couple. Non-matrimonial assets may be protected in the event of divorce if the family court agrees to exclude them from your divorce financial settlement. The family court is less likely to agree to exclude non-matrimonial assets from a divorce financial settlement if your matrimonial pot (i.e. matrimonial assets) will not meet both of your post-divorce financial needs. In this case, the UK family court may consider splitting any non-matrimonial assets.
It is important to note that whether you are about to get married, married or going through a divorce, your options for protecting your assets in divorce will depend on your unique circumstances. This article is intended for informational purposes only and should not be considered as legal advice. If you have any questions about safeguarding your assets before or during divorce, consult an experienced divorce lawyer for tailored advice.
Prenuptial Agreement
You can protect your assets before marriage by entering into a prenuptial agreement. Prenuptial agreements set out what will happen to your joint and separate property if you divorce. It is essential that your prenuptial agreement is drawn up correctly and legally valid. To be considered legally valid, there must be no mistakes, it must be clear, both parties must understand the agreement, and there must be no signs of duress or undue influence. Undue influence occurs when one partner abuses their influence over another party, forcing them into agreement.
While prenuptial agreements are not legally binding, they will normally be taken into consideration by the family courts when making decisions on divorce financial settlements. Without a prenuptial agreement in the UK, there is a greater possibility that your non-matrimonial assets will be included in the marital pot for division between you and your partner. This is even more likely to be the case if your matrimonial assets are insufficient to cover both of your financial needs.
Post-nuptial Agreement
A post-nuptial agreement has the same effect as a prenuptial agreement when it comes to protecting your money during divorce. The difference is that a post-nuptial agreement is reached by couples who are already married.
Trust
When it comes to using a trust to protect assets in divorce, it is important to understand the different types of trust and how to ensure it will taken into consideration by the family court when deciding on a divorce financial settlement. Some of the most common trusts include Declarations of Trust, Life Interest Trusts, and Discretionary Trusts. The courts in England and Wales have discretion regarding how whether trusts should be included in the marital pot for division between divorcing couples. If they believe that the trust was used to hide assets in a divorce or is a ‘sham’, then they are more likely to include any assets within the trust within the financial settlement.
Negotiate a divorce financial settlement
Perhaps the best way to ensure that your assets are protected from divorce is to negotiate an agreement as part of your divorce financial settlement. This approach means that there can be full and frank disclosure of the financial assets held by both parties and an amicable agreement reached, which is unlikely to be contested in the future. It is important to seek sound legal advice from a divorce lawyer when negotiating a divorce financial settlement, whether you are agreeing between yourselves, with the aid of a mediator, or through the courts.
With all of the measures outlined above, there is always a possibility that one party can make a claim against protected assets, especially if not drafted correctly. To ensure that your arrangement will protect your assets in the event of divorce, please speak to our experienced divorce solicitors for advice and guidance based on your unique circumstances.
Can you divorce without splitting assets?
We are often asked how to divorce a husband or wife while keeping everything. The reality is you can divorce without splitting assets if both parties agree to keep their own assets, as divorce itself does not automatically divide your finances.
However, the risk of divorcing without splitting assets is that without a divorce financial settlement or a legally binding agreement, there is a possibility that they may be able to make a claim against those assets in the future. To legally protect yourself from future financial claims, it’s recommended to formalise your agreement through a clean break order, which legally confirms that neither spouse can claim against the other’s assets in the future. Whether you can reach an agreement to divorce without splitting assets depends on factors such as the length of your marriage, the nature of your financial assets, your financial needs, and whether you have children together.
