Divorce among HNW individuals can, from an advisor/lawyer point of view, be eaiser to manage in terms of handling arguments over assets than among those with more limited means. The author examines today's landscape.

The following guest article comes from David Thompson, a partner at law firm Seddons. Thompson writes about the financial considerations facing wealthy couples going through divorce, and how some of the statistics relating to divorce may not tell the full story. If you wish to comment, email tom.burroughes@wealthbriefing.com  The usual editorial disclaimers apply to views of guest contributors.

High net worth couples need to know that the UK divorce process usually takes six to nine months. It will generally cost at least £20,000 ($249,786) plus VAT for each party, as well as additional legal fees. The financial status quo – each party must continue to meet current financial obligations – should continue until resolution.

Surprisingly, practitioners find that divorcing HNW couples is easier than divorcing couples who have fewer and perhaps more limited assets and earning capacity. The latter cases often lead to harder choices and more entrenched positions. Of course, wealthier people will not happily or easily give away swathes of their assets but, because there is usually more than enough to meet the parties and their children’s actual needs, it often means that these situations are more easily dealt with in mediation or in settlement meetings between solicitors with the individual. Discrete issues which may prove intractable can then be dealt with separately through arbitration.    

For couples who are not in such a comfortable position financially, however, each round of negotiation and compromise can mean the difference between affording a home or even being able to put enough food on the table and paying bills. In these situations, often mediation becomes more fraught and stressful for the parties as they struggle to find some way to afford running two households instead of one. Lawyers therefore often come across families in these difficult situations who find some sort of way to continue to live together and perhaps spend a week on and week off with parents staying with family or friends on their ‘off-week’ to save money.

How the trends shown in the statistics compare with what is seen
The latest statistics on divorce tell us that fewer divorces are taking place in the UK. It is highly likely that parties are finding new and innovative ways of living separately without pressing the divorce button. This may well involve signing a post-nuptial agreement setting out how to divide up the financial spoils should the parties eventually divorce. Parties may opt for a separation agreement instead, agreeing to live separately and signing a document that sets out their financial obligations to each other and setting out who gets what. Should the parties go on to divorce then the parties expect the terms of this agreement to be mirrored in any subsequent court order. Bear in mind what has already been set out above that some couples struggling financially might just have to stay together and find a way to manage as the family finances simply cannot stretch to running two homes and two sets of household bills.

Impact of no-fault divorce since 2022
The main impact of no-fault divorce is the growth of joint divorces. Here parties agree to jointly divorce each other. This saves on court fees and is less confrontational. Whilst there is at least anecdotal evidence in the industry that more men seem to be taking the lead than before as there is no advantage as to who divorces whom and the only issue is the court fee. No-fault also takes out a lot of the sting, pain, aggression and arguing out of the process which can only be a good thing. This allows the parties to approach the end of their marriage in a more positive frame of mind and lends itself to parties exploring alternative dispute resolution options.

What non-confrontational and mediation options exist?
The best and most likely way to succeed is to instruct sensible and pragmatic lawyers who will collate full financial disclosure. They should work collaboratively with their opponent, with compromises enabling both sides to reach a mutually acceptable deal without the need for court intervention.  

Some options to consider away from the adversarial court arena: