How should special contributions be applied in divorce settlements?
Some spouses rely on their genius contribution to reduce the amount of property awarded to the other spouse. However, courts are more likely to divide such property 50:50 between the partners. Why or how are special contributions applied in divorce settlements as 50:50 between the partners will depend on individual circumstances. For example, what contributions were made by each spouse? Were any assets hidden in bad faith only to be revealed during asset disclosures during the divorce proceedings? Disputes in divorce settlements can arise or made more complex when assets are tied into trusts created by the couple.
A case where the division of trust assets was considered in Charman v Charman [2007] EWCA Civ 503. At the start of their marriage, the couple did not have any property. During their marriage, the husband used his genius to post impressive profits in the insurance sector. The husband moved abroad and also created several trusts amounting to £131m with offshore trusts holding £68m.
During divorce, the wife argued that she was entitled to 45% of the assets. However, the court acknowledged the man’s special contribution because of his genius and awarded her 36.5 % of the assets. This case is essential because it offers guidelines on instances where the court will depart from the 50:50 division and consider special contribution in the division of marital assets.
The UK Law: fair or unfair distribution of marital assets in divorce settlements
This is exemplified in section 25 (2) (f) of the Matrimonial Causes Act 1973 i.e., the contributions that each spouse has made or will make in the foreseeable future. It is important that the contribution of the spouse supported the ‘genius spouse’ to achieve the goals he/she pursued. Maybe the ‘genius spouse’ was not supported by the spouse at all for the special contribution to the marriage.
The genius spouses
Consider this hypothetical case. Mrs. X is an accomplished successful opera singer. She is married to a self-employed carpenter; Mr. X. Mrs. X was the main breadwinner in the marriage. She paid the mortgage. She saved the remainder in her personal account. Mr. X stayed at home and continued his self-employed work, while Mrs. X was on her tours. He paid the utility bills and up-keeping of the house. The couple fell out of love and decided to divorce, splitting all assets. Mr. X argued that he supported his wife so he wanted all assets to be split 50:50. Mrs X argued that her special contribution should be awarded entirely to her. The marital home should be split 50:50.
The court will need to decide whether Mr. X’s contribution to the marriage supported Mrs. X in her opera career. Did he enable her to provide a special contribution? Was Mr. X a hindrance that affected her performance because the couple lived in such disharmony when together?
So how should special contributions be applied in divorce settlements?
Have you or your partner have a made a sole special contribution to your marriage assets? Would you like support in discussing the way forward in this? If yes, then it is certainly worth consulting advisors for a more informed proposal for your assets in your circumstances.
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