The “Fair Shares” project, a recent study by the Nuffield Foundation, aims to shed light on the financial and property arrangements that divorcing couples make, how they come to these arrangements and how they cope with the post-divorce set-up.
Whilst the focus of the report is intended to capture the full spectrum of society, there are some ‘myth busters’ that high net worth individuals in particular can learn from, as explained by Divorce and Family senior associate Ellie Hampson-Jones here.
MYTH: If I use a lawyer, it will make things more acrimonious, costly and I will end up worse off
Interestingly, the report found the opposite from a financial perspective. In fact, there was an association between using legal services and women getting a better deal.
MYTH: If I instruct a lawyer, all of the tensions will ramp up and we’ll only be able to achieve finality through the court
The report demonstrated that strongest predictor of using mediation was for the parties to have instructed lawyers.
MYTH: The weaker financial spouse will, on divorce, end up with a ‘meal ticket for life’
Around 40% of both men and women considered having no ongoing financial ties to be their top objective. Only 22% of divorcees had a spousal maintenance arrangement.
Women were more likely to receive maintenance than men, but this was nearly always for a fixed term and tied mainly to the recipient’s childcare responsibilities. Payments appeared primarily to be used to address the adjustment to post divorce living arrangements, such as to meet housing and household expenses.
A public lack of knowledge
Concerningly, the findings demonstrate that:
- 10% of homeowners with a mortgage did not know what the equity in their home had been at the point of divorce;
- 38% of divorcees felt their knowledge of their ex-spouse’s finances during the marriage was not good;
- Over a third (37%) did not know the value of their own (let alone their ex spouse’s) pension pot; and
- Nearly a quarter (23%) did not know what kind of employer pension scheme they were enrolled in, whether defined benefit or defined contribution.
In these circumstances, it is easy to see why negotiating a settlement directly with a former spouse may seem attractive on the face of it, but may be a fool’s errand in the long run. Seeking legal advice, understanding what assets are available for division and one’s entitlements are key. The findings of the Nuffield Foundation’s report demonstrate that legal advice can act as a substantial protective tool for a weaker financial party and, pleasingly, as the strongest predicator of a mediated outcome.
You can find further information regarding our expertise, experience and team on our Divorce and Family pages.
Subscribe – In order to receive our news straight to your inbox, subscribe here. Our newsletters are sent no more than once a month.